Taiwan Semiconductor Manufacturing Company (TSMC), a major supplier of processors to Apple, Arm and Nvidia, predicted revenue to decline in 2023 as weakening macroeconomic conditions slow end-user demand, after Q1 sales hit the low end of a forecast.

On an earnings call, CEO CC Wei said TSMC expects a low- to mid-single-digit decline in full-year revenue. He said a fabless semiconductor inventory adjustment in the first half is taking longer than previously expected.

“It may extend into third quarter before rebalancing to a healthier level.”

TSMC forecast Q2 revenue to fall by between 9 per cent (to $16 billion) and 13.5 per cent (to $15.2 billion), year-on-year.

CFO Wendell Huang expects business to continue to be impacted by customers further adjusting inventory.

Revenue in Q1 grew 3.6 per cent to TWD508.6 billion ($16.6 billion) and net profit attributable to shareholders 2.1 per cent to TWD207 billion.

Full-year capex is set at $32 billion to $36 billion, compared with $36.3 billion in 2022.

Huang said the price of electricity in home-market Taiwan increased 17 per cent on 1 April, which is expected to hurt its margins.

Earlier in the month, rival Samsung Electronics said it would cut production of memory chips after estimating operating profit in Q1 would drop 96 per cent and revenue 19 per cent.