Taiwan Semiconductor tells suppliers to delay chip equipment deliveries - report
Sep. 15, 2023 5:03 AM ET
Taiwan Semiconductor Manufacturing Company Limited (TSM) AAPL, AMD, NVDA, ASML, ASMIY, ASMLF, BESIY, BESVF, ASMXF
By: Ravikash, SA News Editor
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Taiwan Semiconductor Manufacturing Company (NYSE: TSM) has said to its suppliers to delay the delivery of high-end chipmaking equipment, amid growing concerns about customer demand, Reuters reported citing people with knowledge of the matter.
The directive by TSM, which is already facing delays at its $40B chip plant in Arizona, is aimed at controlling costs and reflects the contract chipmaker's caution about the outlook for demand. However, the suppliers anticipate the delay to be short-term, according to the report added.
TSM referred the news outlet to CEO C.C. Wei comments from July, that weaker economic conditions, slower recovery in China and softer end-market demand was making customers more cautious and more mindful of controlling inventory.
The companies affected by TSM's instruction to delay include Dutch company ASML ( ASML) ( OTCPK:ASMLF), which makes lithography equipment required for high-end chipmaking.
ASML CEO Peter Wennink, separately, said in an interview to Reuters last week that some orders for its high-end tools were pushed back, without disclosing customers, and that he expected it would be a "short-term management" issue.
ASML stock was down ~3% premarket on Friday on Nasdaq, while ASM International ( OTCQX:ASMIY) ( OTCPK:ASMXF), which is also a supplier to TSM, saw its stock fall ~4% on the Amsterdam Stock Exchange. Meanwhile, BE Semiconductor's ( OTC:BESIY) ( OTCPK:BESVF) stock dipped ~3% on Euronext Amsterdam.
During its Q2 results in July, Wei had also said that the company expects a 10% (in US$) decline in revenue this year. TSM had also noted that it was pushing back the start of production from its new plant being built in Arizona to 2025, from 2024, in part due to insufficient amount of skilled workers required for equipment installation.
TSM — which produces chips for some of the world's largest tech companies including Apple ( AAPL), Nvidia ( NVDA) and AMD ( AMD) — has been sending technicians from Taiwan to train the local skilled workers, but for a short period of time the company expects the production of the N4 process technology to be pushed out to 2025, Chairman Mark Liu had said during the Q2 earnings result in July.
Liu, reportedly, said last week that there had been "tremendous" improvement at the Arizona plant in the past five months. |
