Pessimism in Taiwan's semiconductor industry is intensifying. Because TSMC announced in October that it will reduce its equipment investment outlook for fiscal year 2022 (as of December 2022) by up to 20% compared with the initial plan. The semiconductor industry, which has achieved rare high growth from 2020 to 2021 under the new crown epidemic, is being forced to significantly adjust its business plan.
"Inventory is seeing a constant increase" and "When will the adjustment last?" Among Taiwan's semiconductor manufacturers, equipment and raw material manufacturers, vigilance is constantly increasing.
The opportunity is that when TSMC released its financial report for July to September 2022 on October 13, it lowered its equipment investment forecast for this fiscal year to US$36 billion.
TSMC lowered its equipment investment outlook in 2022 in two stages. The outlook at the beginning of the period was US$40 billion to US$44 billion. It was announced in July that it would be close to the lower limit ($40 billion), but in fact it was reduced by about 10%. By October, due to hidden concerns such as economic slowdown in mainland China and global inflation, it will further decrease by 10%.
The actual amount of the reduction exceeds 1 trillion yen. In the past three years, TSMC has raised its equipment investment outlook many times, taking advantage of the strong demand for semiconductors. This year, before the changes in the semiconductor market in the summer surfaced, the market also expected TSMC to further increase equipment investment. Because of this, these two reductions have had a great impact on the industry.
In the semiconductor market, after entering 2022, "epidemic special needs" such as personal computers, TVs and home appliances will disappear. Global sales of smartphones are also expected to be lower than the previous year, while demand may decline further due to strict epidemic prevention measures in mainland China.
TSMC accounts for 90% of the world's share in the production of cutting-edge semiconductors, with overwhelming competitiveness, and sales of cutting-edge products remain strong. However, there has been a marked decline in demand for previous-generation semiconductors. On November 11, affected by this, TSMC CEO (CEO) Wei Zhejia said that he would postpone the plan to build a factory in Kaohsiung.
Even TSMC, which is at the forefront, is inevitably affected by the deterioration of the market. The latter enterprises are more painful. Semiconductor memory chip DRAM manufacturer Nanya Technology decided to reduce equipment investment by 20% this year, and Powerchip Electronics Manufacturing also decided to reduce by 40%.
After 2020, when the global economy slowed down due to the epidemic, semiconductor companies' exports and equipment investment surged, bringing huge benefits to Taiwan's economy. At present, the east wind is beginning to turn, and Taiwan's economy is ushering in a "moment of patience" waiting for the recovery of the semiconductor market.
