Asian Tech Press (Aug 31)-- Strong silicon chip demand amid global chip shortage has boosted the performance of chipmakers. However, strong demand has also increased upstream equipment and raw materials prices, bringing cost pressures on chipmakers, especially chip foundries.

As the world's largest chip foundry, TSMC's revenue continues to grow, but its operating costs are also increasing. The chip foundry is now also facing cost pressures, its gross profit margin and net profit both declined in the second quarter.

TSMC's second-quarter earnings report showed revenue of $13.289 billion, higher than the previous quarter. Net income was $4.802 billion, less than the $4.981 billion reported in the last quarter.

The gross profit margin of 50% was also less than the 52.4% in the previous quarter and the 53% in the same quarter last year. On the other hand, operating expenses exceeded $4 billion, up from $3.911 billion in the previous quarter and $3.352 billion in the second quarter of last year.

Media reports indicate that TSMC is trying to reduce its expenses. It will negotiate price reductions with equipment and raw material suppliers, hoping to reduce by 15% next year.