The world's largest contract chip supplier is predicting that there will be excessive chip inventory in the future. While the company's net income hit a record, it has led to an excess inventory in the Semiconductor supply chain. It will take a few quarters before things get back to normal. When consumers were eager to upgrade or buy new gadgets that they would rely upon, there was a time when demand for PCs and smartphones declined. Demand has gone down since home offices are fully equipped. In recent months, the culprit of the chip supply shortage has been the decline in the value of the coin. Further uncertainty is being caused by soaring inflation and tensions in the Middle East. TSMC is not the only company warning of decreasing demand for consumer products. The CEO of TSMC said that suppliers have been facing more challenges in supply chains.
There is still a shortage of chips. Demand in other market segments, including data centers and automotive, has not changed despite the increase in inventory of high-end chips in modern consumer gadgets. TSMC needs to reallocate resources because of the tight supply for those areas. The chipmaker says consumer needs will exceed their ability to supply.
Going into the end of the year, TSMC expects demand for its chip technologies to increase. The new M2 processor in the MacBook Pro and MacBook Air is made by TSMC, which is the sole chip supplier for Apple. TSMC supplies many of the same companies as well as some of the less expensive ones.
Let me discuss TSMC's long-term growth outlook. There are near-term uncertainties that may persist, but we believe the fundamental structural growth trajectory in the long-term Semiconductor Demand remains firmly in place.
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