TSMC tells vendors to delay chip equipment deliveries

Taiwan's TSMC, the world's top contract chipmaker, has instructed its major suppliers to delay the delivery of high-end chipmaking equipment due to concerns about customer demand. This move comes as TSMC grapples with delays at its $40 billion chip factory in Arizona and reflects the company's growing caution about the demand outlook. Suppliers, including ASML, expect the delay to be short-term. However, shares in TSMC suppliers, including ASML, ASM International, and BE Semiconductor, fell following the news.

TSMC has been forced to push back production at the Arizona plant by a year to 2025 due to recruitment struggles and union pushback on efforts to bring in workers from Taiwan. The company is also facing uncertainty due to weak demand for smartphones and PCs, and uncertainty about the market for artificial intelligence. TSMC's capital expenditure increased 21% to $36 billion last year due to expansion plans during the pandemic-driven chip boom. The company expects investment spending for this year to be at the lower end of a previous forecast of $32 billion to $36 billion.

Key takeaways:

TSMC has instructed its major suppliers to delay the delivery of high-end chipmaking equipment due to concerns about customer demand.
Shares in TSMC suppliers, including ASML, declined following the news.
TSMC has been forced to delay production at its Arizona plant by a year to 2025 due to recruitment struggles and union pushback.
TSMC is also facing increased capital expenditure, which rose 21% to USD 36 billion last year due to expansion plans during the pandemic-driven chip boom.

TSMC tells vendors to delay chip equipment deliveries

Key takeaways:

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