TSMC Sees Slowdown In Demand For PCs, Smartphones

Chipmaking giant TSMC says China's COVID lockdowns slowed PC and smartphone demand, but given the Taiwanese outfit already struggles to meet demand, company chair Mark Liu was unfussed by the dip.

Speaking informally at the Taiwan Semiconductor Industry Association's general meeting, Liu painted an overall rosy picture of TSMC's current state – but admitted challenges created by tensions between the US and China, as well as COVID-19.

Liu noted that, while China accounts for over half of the world's consumer electronics market, demand for vehicles, high-performance computing (HPC) and Internet of Things (IoT) remains high. The world's troubles therefore "will not have a significant impact" on the company's growth this year.

The chairman said that the company would not change its capital expenditure guidance, which sits in the unprecedented range of $40–$44 billion, but rather would "reorganize and prioritize orders for those areas that still see healthy demand."

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China, however, poses particular challenges. It continues to lock down cities in pursuit of its zero-COVID strategy.

Technology industry hub Shenzhen recently locked down, and Shanghai had its turn this week – and even released the robo-hound to enforce the ban on movement.

Ghost town — Shanghai in an eerie quiet lockdown. With 26 million official residents*, Shanghai is one of the most populated cities on Earth. It looks like a movie—but it’s real.

????You can also spot the isolation centers at the 40 sec mark.

*Undocumented locals=>millions more. pic.twitter.com/TS0btjGueO

— Eric Feigl-Ding (@DrEricDing) March 30, 2022

Liu said the lockdowns did not affect TSMC's eight-inch fab in the city, nor its productivity, as the company made advance workforce arrangements. Reports surfaced that TSMC workers lived, ate, and worked in its factory – an arrangement we last heard of in Vietnam during 2021.

While Liu assured everyone TSMC will be untroubled by demand dips and pandemics, he warned that the cost of components and materials is rising and will eventually be noticed at the cash register.

Liu said that while everyone in the industry was worried about rising costs within the overall supply chain, the semiconductor industry had already absorbed the associated financial hit. ®