“Due to the softening device momentum in smartphone, PC, and consumer end–market segments, we observe the supply chain is already taking action and expect inventory levels to reduce throughout the second half of 2022,” says  CEO C.C. Wei,  “we believe the current semiconductor cycle will be more similar to a typical cycle, with a few quarters of inventory adjustment likely through first half 2023.”

Data centre, auto and HPC orders remain solid.

TSMC 2020 revenue by technology

As well as the effect of soft PC and consumer demand, TSMC’s capex has been affected by the problems its suppliers have faced.

“Suppliers have been facing greater challenges in their supply chains, which are extending delivery lead times for both advanced and mature nodes,” says Wei, “as a result, we expect some of our capex this year to be pushed out into 2023.”