Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, posted a second-quarter profit plunge Thursday as demand for consumer electronics continues to slump.

Here are TSMC’s second quarter results versus Refinitiv consensus estimates:

• Revenue: 480.84 billion New Taiwan dollars ($15.68 billion), vs. NT$478.83 billion expected
• Net income: NT$181.8 billion, vs. NT$172.55 billion expected

TSMC reported revenue slipped 10% from a year ago to NT$480.84 billion, while net income fell 23.3% from a year ago to NT$181.8 billion. The company had previously forecast second-quarter revenue between $15.2 billion and $16 billion.

TSMC said business was impacted by macroeconomic headwinds “which dampened the end market demand, and led to customers’ ongoing inventory adjustment.”

This is the company’s first quarterly net income decline since the second quarter of 2019.

TSMC forecast third-quarter revenue between $16.7 billion and $17.5 billion.

“Moving into third quarter 2023, we expect our business to be supported by the strong ramp of our 3-nanomenter technologies, partially offset by customers’ continued inventory adjustment,” Wendell Huang, CFO of TSMC said.

TSMC makes chips for Apple’s iPhones. Apple’s next processor for its iPhone is rumored to be based on the 3-nanometer process technology. Apple typically releases its latest iPhone in September so it is likely ordering chips from TSMC in the third quarter.

The nanometer figure refers to the size of each individual transistor on a chip. The smaller the transistor, the more of them can be packed onto a single semiconductor. Typically, a reduction in nanometer size can yield more powerful and efficient chips.

However the company’s repeated warning on “inventory adjustment” is likely to continue to weigh on revenue.

In May, TSMC’s largest customer Apple reported overall sales fell for the second quarter in a row.

The global smartphone market plummeted 11% in the second quarter compared with a year ago, according to a report published Tuesday by data insights provider Canalys.

But Canalys said there are signs pointing to a recovery in the smartphone market.

“The smartphone market is sending early signals of recovery after six consecutive quarters of decline since 2022,” said Le Xuan Chiew, analyst at Canalys. “Smartphone inventory has begun to clear up as smartphone vendors prioritized cutting inventory of old models to make room for new launches.”