TSMC chairman Mark Liu warns consumer demand for smartphones, PCs, and TVs is slowing down, especially in China, and components and materials costs are rising
Rising costs could be passed on to consumers, chairman of tech titan warns — Taiwan tech titan TSMC says demand …
Context & Ripple Effects
TSMC had already committed to a Japanese plant centered on 22nm and 28nm production, while Mark Liu’s warning identifies weakening consumer-device demand and higher inputs as near-term constraints on the broader chip cycle.
Later coverage makes the split clearer: non-AI chip sales lagged in 2023, even as US-led AI demand eventually outstripped TSMC’s available capacity. The significance is not a uniform semiconductor downturn, but diverging demand across end markets and chip types.
First-order effects
- TSMC’s phone, PC, and TV customers face weaker demand—especially in China—at the same time that higher component and materials costs threaten their margins.
- Consumers may absorb part of the cost increase through higher device prices, as TSMC warns its rising inputs can be passed through.
Second-order effects
- Device makers have less room to raise prices when end-market demand is slowing, increasing pressure to reduce orders and inventory exposure across the consumer-chip supply chain.
- The consumer slowdown helps explain why TSMC, Intel, and peers later slowed older-chip capacity expansions amid lackluster demand and tariff uncertainty.
Third-order effects
- If consumer and AI demand continue to diverge, foundry capacity planning will become less about total wafer demand and more about which process nodes and end markets can support new investment.
- The pattern points to a more segmented semiconductor cycle: mature and consumer-oriented capacity can be constrained by demand, while advanced capacity faces shortages from AI-led buyers.
The trend: Semiconductors are moving toward a bifurcated demand cycle, with weak consumer electronics and older chips alongside tight AI-oriented capacity.