TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Company (TSMC) on Thursday (Oct. 13) said it is dialing back capital expenditure this year amid slowing semiconductor demand and increased costs.

On an earnings call on Thursday, TSMC said third quarter profit came in at US$8.8 billion (NT$281 billion), representing a 79.7% increase from a year earlier. Meanwhile, Q3 revenue was US$19.2 billion, a 47.9% bump from a year ago.

The Taiwan chipmaker said its 5nm chips accounted for 28% of total wafer revenue in Q3, while its 7nm process silicon made up 26%. Advanced processes, 7nm and above, accounted for 54% of total wafer revenue.

The company’s North American clients accounted for 72% of Q3 revenue, up from 64% in the second quarter, according to The Wall Street Journal (WSJ). Meanwhile, China made up 8% of third quarter revenue, which was down from 13% in Q2.

Despite its strong Q3 performance, the company also said it is lowering its CAPEX budget for 2022 to US$36 billion, down from at least US$40 billion announced last quarter, per The WSJ. TSMC said they revised spending plans due to adjusted plans to expand capacity in light of reduced global chip demand and inflation concerns that have bumped up costs.

TSMC CEO C.C. Wei (魏哲家) said he was looking forward to the fourth quarter when the company would have more excess capacity compared to the same periods over the previous three years, The WSJ reported. Wei added that continued demand for automotive chips and high-performance computing would drive growth over the next few years.