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STORY: The world’s biggest contract chip maker says things are going to get worse before they get better.

TSMC makes semiconductors for the world’s top names, including Apple.

But it says tech demand is looking soft amid global economic worries.

It says there’s also a glut of products already on store shelves.

The firm now predicts a 16% plunge in sales over the second quarter as a result.

However, sales are then expected to start picking up again, broadly corresponding with the outlook from Apple.

Other big tech names, like chipmaker Nvidia, and rival AMD, have offered similar forecasts.

For the first quarter, TSMC posted a surprise 2% rise in net profit, which hit close to $6.8 billion.

Even so, that was still its smallest profit growth since mid-2019.

Looking at overall chip demand, TSMC is predicting declines, but says it can outperform the market.

In the past it’s been shielded by its dominance in the production of high-end chips for customers like Apple.

TSMC says it’s talking to U.S. authorities about subsidies for ramping up production there, but wouldn’t comment further.