Asian chipmakers slide as TSMC report stokes demand fears By Investing.com

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<p>Investing.com&#8211; Shares of major Asian chipmaking firms sank on Monday, after a Reuters report said that Taiwan’s TSMC- the world’s largest contract chipmaker- had asked its suppliers to delay deliveries amid concerns over slowing demand. </p>
<p dir="ltr">The report follows a warning by TSMC (TW:) (NYSE:) during its second-quarter earnings, where CEO C.C. Wei warned that a boom in artificial intelligence development was unlikely to offset a broader, cyclical slowdown in the industry. </p>
<p dir="ltr">TSMC’s Taiwan-listed shares fell more than 3%, while South Korean memory chip makers <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> SK Hynix Inc </span></span> (KS:) and <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Samsung Electronics Co Ltd </span></span> (KS:) lost more than 2% each.</p>
<p dir="ltr">Shares of Semiconductor Manufacturing International Corp (HK:), China’s biggest chipmaker, fell 3% in Hong Kong trade, while peer <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Hua Hong Semiconductor Ltd </span></span> (HK:) lost 1.6%. The two spurred an over 1% loss in the index.</p>
<p dir="ltr">Major chipmakers were reeling from a substantial decline in demand over the past year, amid surging interest rates and slowing investment in technology infrastructure. </p>
<p dir="ltr">While a boom in AI development has fueled some chip demand this year, particularly for specialised manufacturers such as NVIDIA Corporation (NASDAQ:), most Asian players have warned that broader demand is likely to remain muted. Declining computer and mobile phone sales around the globe have furthered this notion.</p>
<p dir="ltr">TSMC had logged profit and revenue declines for the first half of the year, as did Samsung and SK Hynix. The drop in earnings also came from rampant oversupply, as a chip demand boom through 2020 and 2021 saw manufacturers ramp up their production capacity.</p>
<p dir="ltr">TSMC is struggling with delays in the development of a $40 billion facility in Arizona, which analysts warn could be a loss-making venture for the chipmaker, even if the facility comes online.</p>
<p dir="ltr">The chipmaking giant forecast a 10% decline in sales through 2023, and also expects a weaker operating margin for the third quarter. Its capital expenditure, however, has increased substantially so far this year.</p>
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