The world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Company, has warned of a deepening semiconductor slump, as the boom in artificial intelligence fails to offset global economic woes and China’s delayed recovery.
TSMC now expects its 2023 revenue to drop by 10 per cent, rather than the less than 5 per cent it forecast three months ago, the Taiwanese company told investors on Thursday. This would translate into a 15 per cent revenue decrease in the second half of the year, compared with the same period in 2022.
“Three months ago we were probably more optimistic, but now [we are] not. The recovery of the Chinese economy is weaker than we thought, so end-market demand is not as we expected,” said CC Wei, chief executive. “Although we have very good AI end-market demand, it is not enough to offset [that weakness].”
The warning comes as the growth of large language models behind generative AI services such as ChatGPT is boosting the need for high-end processors for data centres, with TSMC making chips for Nvidia, whose AI processor business is booming.
I am starting to build up a position against AI exposure. AI I think is close to a hard dump. There's a lot of technical confluence of short signals and a feel of AI mania in the air.
If this is a bull trap, the following drop typically will wipe off at least 75% from the bull trap high. 25 or so for the target. Probably a good buy somewhere just under 20 if this move happens.
$Taiwan Semiconductor Manufacturing(TSM)$ $C3.ai, Inc.(AI)$ $NVIDIA Corp(NVDA)$
Comments