HSINCHU, Taiwan -- Consumer electronics demand is showing signs of slowing amid geopolitical uncertainties and COVID-related lockdowns in China, the chairman of Taiwan Semiconductor Manufacturing Co. said on Wednesday.
The slowdown is emerging in areas "such as smartphones, PCs, and TVs, especially in China, the biggest consumer market," TSMC Chairman Mark Liu said.
A key Apple supplier, TSMC is the world's biggest contract chipmaker and a barometer of global electronics demand.
Liu also warned that the cost of components and materials are rising sharply, pushing up production costs for tech and chip companies.
"Such pressure could eventually be passed on to consumers," Liu said on the sidelines of an industry event where he was speaking in his capacity as chair of the Taiwan Semiconductor Industry Association.
Taiwan's semiconductor industry is the world's second-largest chip economy by revenue, behind only the U.S.
"Everyone in the industry is worried about rising costs across the overall supply chain... The semiconductor industry already and directly experienced that cost increase," Liu said, adding that the industry is also concerned about macroeconomic uncertainties this year.
TSMC, however, is not likely to change its growth target and capital expenditure this year, he said.
"Despite the slowdown in some areas, we still see robust demand in automotive applications and high-performance computing as well as internet of things-related devices," he said. "We still cannot meet our customers' demand with our current capacity. We will reorganize and prioritize orders for those areas that still see healthy demand."
TSMC, like other chipmakers, has been struggling to meet demand amid a global semiconductor shortage that emerged in late 2020.
The chairman's remarks come as global institutions have lowered their forecasts for economic growth this year. The International Monetary Fund is set to trim its global forecast for 2022 in April due to the Ukraine war and macroeconomic uncertainty in a number of countries. The IMF previously estimated 4.4% global growth for the year. China, the world's second-largest economy, set a growth target of 5.5% this year, the lowest in 30 years.
There are already signs of slowdown in consumer demand. Nikkei Asia reported on Monday that Apple has reduced orders for its recently released iPhone SE by up to 3 million units.
TSMC in January said it aims to grow by 25% or higher in U.S. dollar terms for revenue this year and spend a record $44 billion in capital expenditure for all 2022.
TSMC says demand for smartphones, PCs starting to slow
Rising costs could be passed on to consumers, chairman of tech titan warns
