Facing weak chip sales, TSMC asks US for assistance on CHIPS Act funds


< img src="https://images.idgesg.net/images/article/2022/07/dji_0259..-100929794-large.jpg?auto=webp&quality=85,70"alt="" > Dealing with a sharp drop in profits, Taiwanese semiconductor giant TSMC is seeking assurances from the United States about subsidies it will receive when it constructs its brand-new $40 billion manufacturing centers in Arizona.

TSMC’s United States investments belong to the chipmaker’s strategic move to expand beyond Taiwan, due to the nation’s own political stress with China, in addition to the onoing US chip trade war with China, which is putting companies internationally in the crosshairs.

Trade stress are coming at a time when chip makers find themselves in a market environment that features substantially weakened need compared to past years.TSMC itself

saw net earnings drop by more than 15% on a year-on-year basis in March, according to an initial income report provided Monday.

While March 2022 saw TSMC’s net profits leading $5.6 billion, March 2023’s figures dropped to $4.7 billion, which was a sharp decline even in month-to-month terms. (February saw TSMC’s incomes reach $5.3 billion.)

The numbers are better for TSMC when viewed on a quarterly basis– the business posted a 3.6% net revenue boost in the very first quarter of 2023, for a total of $16.6 billion, compared to last year’s figure of $16.1 billion.

PC deliveries drop as pandemic surge subsides

The recent decrease is likely connected to the sharp drop in need for end-user devices. Worldwide deliveries of conventional PCs stopped by 29% in the quarter compared to a year before, to a total of 56.9 million, according to a report provided today by IDC. Scientists for IDC expect sales to continue to suffer in the near term– thanks to the pandemic-fueled spike in demand finally abating– but said that typical refresh cycles could begin to take hold once again in 2024, renewing the market.Yet even that is far from a certainty, alerted IDC devices and displays research study vice president Linn Huang.”If the economy is trending up

already, we expect significant market upside as consumers look to refresh, schools look for to change worn-down Chromebooks, and services move to Windows 11,”Huang stated, in the report.” If economic crisis in key markets drags out into next year, healing might be a slog.”TSMC’s down numbers are not

an aberration for the silicon market, as other chipmakers, including Samsung, have reported shrinking profits. On the other hand business like TSMC and Samsung are being greatly incentivized to produce their more advanced chips in the US, thanks to brand-new laws like the CHIPS and Science Act. That pressure has triggered additional anxieties for overseas chipmakers, who will need to adhere to a broad set of United States guidelines for semiconductor makers seeking CHIPS Act funds. A few of the conditions showed the administration’s social and financial priorities, including for a varied workforce.In addition, there are issues about the concept of clawbacks of excess profits that could be owed to the government by means of its” upside sharing”arrangements, as well as worries over private business details being concealed, according to a Reuters report. Taiwan Economy Minister Wang Mei-hua told press reporters on Monday that TSMC was talking to the United States about the information of the CHIPS Act subsidies, Reuters reported, which added that it received a statement from TSMC that confirmed the talks.”We can verify that we are interacting with the U.S. government about the CHIPS Act assistance, “according to the TSMC statement. Copyright © 2023 IDG Communications, … Source

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