TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) has told some of its biggest suppliers to push back the delivery of advanced chipmaking equipment, Reuters reported.

The move by TSMC is meant to address costs and shows the chipmaker is increasingly cautious about demand outlook, sources told Reuters. Sources also said that suppliers expect the delay to be short-term.

Dutch semiconductor toolmaker ASML, which makes advanced lithography machines using cutting-edge chip manufacturing, is one of the suppliers affected by the delays, sources informed Reuters. ASML CEO Peter Wennink told the outlet last week some of its orders for high-end tools have been delayed, but that he expected it would be a “short-term management issue.”

Wennick said that his company had seen several news reports about TSMC’s fab readiness in Arizona and Taiwan. In July, TSMC announced that commercial production at its first Phoenix fab would be delayed a year until 2025 as it faced difficulties recruiting skilled workers and in August had to deal with resistance from American unions in its efforts to bring workers from Taiwan to work on the Arizona project.

“If you ship a lot of people from Taiwan to help build a factory in Arizona, they’re not working somewhere else. So this is kind of a double whammy,” Wennink told Reuters.

Meanwhile, TSMC Chair Mark Liu (劉德音) last week said that there had been significant improvement at its Phoenix site over the last five months.

TSMC in July predicted its 2023 sales would drop by around 10%, citing weak smartphone and PC demand, combined with uncertainty about the AI market, according to Reuters.