Shares in Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chipmaker, fell sharply on Tuesday after the company issued its first earnings forecast cut in seven years.

TSMC said on Monday evening that “continuing weakness in global economic conditions” was leading to lower demand, and revenues in the past three months of this year are now expected to be between NT$63bn (US$1.87bn) and NT$65bn, compared with a previous forecast of between NT$69bn and NT$71bn. The operating profit margin is also expected to fall by four percentage points to 17-19 per cent.