In a nutshell: We've seen plenty of reports about the current doom and gloom within the tech industry caused by recession fears, but there are some rays of hope. The world's biggest chip manufacturer, TSMC, has raised its forecast for revenue growth this year, indicating that demand for electronic goods in some sectors remains strong.
Bloomberg reports that TSMC has increased its sales growth from the previous ~30% to somewhere in the mid-30% range. It also gave a projected revenue for the September quarter of $19.8 billion to $20.6 billion, beating previous estimates of $18.5 billion.
Many tech companies are feeling the strain in wake of the previous two years' pandemic-induced demand. A downturn made all the worse by rising inflation, skyrocketing fuel prices, and the Russia/Ukraine war. The smartphone market had one of its worst quarters in recent memory; PC shipments fell by double digits; and Google, Microsoft, and Tesla are all streamlining their businesses in response to the economic changes.
But TSMC raising its sales growth projections is good news, especially as there have been reports of Apple, AMD, and Nvidia looking to scale back their upcoming orders from the chipmaker over fears of waning consumer demand.
Despite the economic downturn, TSMC still managed to generate T$237 billion ($7.9 billion) in net income for the quarter ending June, beating estimates, while revenue was up 44%, and its gross margin was the highest in 26 years. Much of TSMC's business came from its biggest customer, Apple, and the growing demand for semiconductors in cars.
TSMC isn't completely oblivious to the threat of a recession, though. It plans to move some of the planned $44 billion being spent on increasing capacity this year, and some of next year's expansion money, in light of the uncertain environment and equipment delays. And like other tech companies, its shares are down (20%) this year. Still, the overall outlook is positive.
TSMC Chairman Mark Liu previously tried to alleviate fears that the economic situation would hugely impact the company. "The current inflation has no direct impact on the semiconductor industry as the demand drop is mainly for consumer devices like smartphones and PCs while EV demand is very strong and partially exceeds our supply capacity so we are making inventory adjustments," he said. "Utilization rate is full for the rest of the year."