The Zhitong Finance App learned,$Taiwan Semiconductor (TSM.US)$The outlook for the expansion of the chip market was lowered, warning that the smartphone and PC computer markets are still weak.

The world's largest advanced chip maker lowered its 2024 semiconductor market growth forecast (excluding memory chips) from more than 10% to around 10%. CEO Wei Zhejia also lowered growth expectations for the TSMC-dominated foundry industry. Meanwhile, the company maintained its expectations of spending between $28 billion and $32 billion on capacity expansion and upgrades this year.

“Macroeconomic and geopolitical uncertainties remain and may affect consumer confidence and terminal market demand,” Wei Zhejia told analysts during a conference call. Today, TSMC's stock price in Taiwan once fell by more than 6%, the biggest intraday decline in about 18 months.

Previously, TSMC and other chip makers saw growth potential from various demands for AI. The new sales forecast also highlights the differences in the fate of companies along different paths, such as making chips for consumer goods and the differences between companies that design and manufacture the most advanced chips for artificial intelligence processing. However, this outlook announced by TSMC overshadows the strong performance of expected revenue.

Notably, TSMC's revenue forecast is also likely to be a sign that other chip giants are preparing to release earnings reports.$ASML Holding (ASML.US)$The first-quarter earnings report released on Wednesday showed that the company's first-quarter bookings fell 22% year over year. According to reports, including$Intel (INTC.US)$A number of companies, including these, will release financial reports next week.

Prior to making this forecast, the company achieved quarterly profit growth for the first time in a year. This house$NVIDIA (NVDA.US)$und$Apple (AAPL.US)$Major chip makers also expect second-quarter revenue to be between 19.6 billion US dollars and 20.4 billion US dollars, higher than the forecast of about 19.1 billion US dollars.

This outlook may help ease some investors' concerns that AI demand will not be supported or that smartphones will take longer to recover. TSMC only revealed its fastest sales growth since 2022 last week. Despite global macroeconomic turmoil, TSMC still expects at least 20% revenue growth this year as the semiconductor market recovers.

This also shows that demand for chips that accelerate the development of artificial intelligence is beginning to offset the impact of the downturn in the smartphone market. Apple's revenue in 2023 accounts for about a quarter of TSMC's revenue, but at the beginning of this year, iPhone sales declined sharply.

Furthermore, TSMC said it will begin mass production of next-generation 2nm chips in the last quarter of 2025, and the time frame will generally be reduced starting next year. Wei Zhejia added that TSMC's automobile business will decline this year. The previous forecast was an increase, but no detailed explanation was given.

Since the market is betting that the company will be one of the most obvious winners in the global AI boom, TSMC's market value has grown by about 340 billion US dollars since falling to a rock bottom in October 2022. On Thursday, the company announced a 9% increase in net profit for the first quarter, reaching NT$225 billion (approximately US$7 billion), better than expected.

Executives said that the earthquake that occurred in Taiwan this month damaged some of the wafers used in its chip production, causing gross margin to drop by about 50 basis points in the second quarter.

In the long run, investors expect chips focused on artificial intelligence to gradually account for a larger share of revenue. TSMC said in January this year that the company's artificial intelligence business revenue is growing at a rate of 50% per year. However, some investors have warned that in the long run, the current level of demand for artificial intelligence chips is unsustainable.

Wei Zhejia said that the current market demand for artificial intelligence chips is extremely high, and the company will do its best to increase production capacity to mitigate shortages. He said, “We may not be able to meet this year, but we will do our best to achieve it next year.”