(Bloomberg) — Taiwan Semiconductor Manufacturing Co.’s sales returned to contraction last month after October’s gains, showing there is still some way to go before the global chip market fully recovers of a prolonged recession.
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The world’s largest supplier of made-to-order chips reported a 7.5 percent decline in revenue to NT$206 billion ($6.6 billion) in November. Revenue for the first 11 months fell 4.1 percent from a year earlier to NT$1.99 trillion.
Nvidia Corp.’s main chipmaker and Apple Inc. in October forecast revenue of between $18.8 billion and $19.6 billion for this quarter. During its third-quarter earnings conference call, CEO CC Wei said the company expected the chip market to bottom “very soon” but did not predict a strong rebound in due to uncertainty around China, which is struggling with a moribund economy and escalating US trade sanctions.
Read more: TSMC plans long-awaited chip recovery after Outlook beatdown
Electronics makers and chip suppliers have struggled to deal with a glut of unsold inventory, accumulated after the pandemic-caused shortage of semiconductors caused customers to stockpile and double or triple their orders. But today, chip industry leaders – from TSMC to Samsung Electronics Co. and Lenovo Group Ltd. – say the industry has essentially exhausted its excess supplies.
Demand for artificial intelligence chips is helping companies like Nvidia and Advance Micro Devices Inc. and filling orders for TSMC’s most advanced production nodes. On Wednesday, AMD raised its forecast for the AI ​​chip market to more than $400 billion over the next four years, more than twice the projection AMD gave in August, showing how quickly Expectations are evolving when it comes to AI hardware. TSMC also makes AMD chips, including the latest AI chip, the MI300.
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