TAIPEI -- Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker and a major Apple supplier, has downgraded executive cars and cut business travel in a belt-tightening campaign meant to prepare for a difficult 2019.

The Taiwanese company has told its vice presidents to swap their lease cars from the luxury of Mercedes-Benz to midsize Toyota Camrys, the Nikkei Asian Review has learned.

TSMC has also reduced trips to trade shows and international conferences as the industry struggles with the impact of the U.S.-China trade war and slower smartphone sales. The cutbacks are being interpreted internally as one of the most severe in almost a decade, according to a source with knowledge of the plan.

"The scale of the austerity this time is even stricter than the one implemented during the financial tsunami [of 2009]," said a source with knowledge of the plan. "Especially international business trips -- the travel requests are much more difficult to get approved by the company."

"The core idea is to reduce unnecessary costs," another person familiar with the plan said. "The company wants staff not related to the business and marketing side to be more focused on their work in chip production factories rather than running here and there to attend trade shows abroad."

Between 2009 and 2010, general costs and administrative expenses as a share of total revenue fell by roughly 20% while turnover increased 40%.

TSMC is the sole supplier of iPhone core processors and also helps produce chips for virtually all major players worldwide such as Qualcomm, Nvidia, NXP, Broadcom, MediaTek and Huawei's Hisilicon Technologies. The company has long served as a bellwether of global electronics demand.

The chipmaker's crackdown on costs -- which began to intensify around mid-2018, sources with knowledge of the plan say -- reflects its pessimism about the current quarter and 2019. Like other smartphone suppliers, TSMC is preparing for a slowdown in the smartphone and semiconductor industries, while trade spats between the U.S. and China add more uncertainty, industry sources said.

Sources could not confirm the scale of the planned cost savings. But company filings show that TSMC's administrative expenses dropped by 599 million New Taiwan dollars ($19.5 million) on the year to NT$14.57 billion in the first three quarters in 2018.

Elizabeth Sun, TSMC spokesperson and head of corporate communications, confirmed that the chipmaker had adopted a more careful review of international trips and changed the car leasing programs for vice presidents. But the stricter review of travel expenses has been occurring for more than a year, she said.

"Any disciplined company would have clear principles regarding international travels," Sun said. "It's not about saving costs but really about optimizing resources and helping employees to make better use of their time. The company would review case by case to see if those international trips are important and necessary."

TSMC is not alone in expecting a tougher 2019. Major iPhone assembler Foxconn, formally traded as Hon Hai Precision Industry, and its subsidiaries are preparing for a downturn with 100,000 job cuts across the group by the end of 2018, Nikkei Asian Review reported last month.

On Wednesday, iPhone camera lens provider Largan Precision reported a 29% drop in November revenue over the same month last year, while key metal frame supplier Catcher Technology saw a 13% decline on the year for November sales.

Cirrus Logic, an audio chip provider for iPhones and a TSMC client, cut its revenue outlook this week, following warnings from peers such as Qorvo, Lumentum and AMS that demand for new iPhone models had been lackluster in November.

The semiconductor industry has enjoyed a boom over the past two years, driven mostly by surging memory chip prices and tight supply. But signs of softening emerged in mid-2018 due to lukewarm demand in mobile, data center, automotive and industrial applications.

World Semiconductor Trade Statistics, one of the chip industry's best-known data providers, last month cut its 2019 growth forecast for the semiconductor market to 2.6% from 4.4%. More pessimistic market watchers such as CLSA predict a decline of up to 5% for the chip industry next year, according to a recent research note.

Capital expenditures, an early indicator for investment, for all semiconductor companies are expected to retreat by about 12% in 2019, according to the latest forecast from IC Insights.

TSMC has lowered its 2018 sales growth target several times, from up to 15% at the beginning of the year to around 6%, citing lackluster demand for cryptocurrency mining and mid- to low-end smartphones.

Most investors still hope for TSMC to maintain revenue growth of 5% to 10% in dollar terms over 2019 -- an annual target the chipmaker set for a five-year period since 2016.

For the upcoming year, TSMC won an order for the newly disclosed premium mobile chipset -- dubbed Snapdragon 855 -- from Qualcomm. The Taiwanese company also secured orders from Advanced Micro Devices and IBM to produce high-end chips for data center servers, and it continues to be the sole supplier of core processor chips for Apple's iPhones and iPads.

TSMC will be protected from the worst of the semiconductor slowdown, said Mark Li, an analyst at Bernstein Research. The company specializes in higher-end products, maintains a diverse customer base and does not make mainstream memory chips including DRAM and NAND like  Samsung Electronics, SK Hynix, Toshiba and Micron, he said.

"But we are still concerned that its Apple orders could decline for 2019, and by the continuous weakness in cryptocurrency mining chip demand," he said. "Currently, we think TSMC could grow some 5.5% for 2019."

Li added that the uncertainties caused by the trade and technology confrontation between China and the U.S. could hamper the chipmaker's business further. "Most investors would stay on the conservative side till the first half of 2019," he said.

Ray Chou Yeutien, a research fellow at top Taiwanese institution Academia Sinica, told the Nikkei Asian Review that the new 90-day truce in the Washington-Beijing trade conflicts would not remove any of the impact.

C.C. Wei, CEO and vice chairman of TSMC, also acknowledged for the first time on Nov. 27 that the trade tensions could hurt the semiconductor industry. Wei was speaking as chairperson of the Taiwan Semiconductor Industry Association.