A person walks previous TSMC’s emblem on the firm’s headquarters in Hsinchu, Taiwan.
Sam Yeh | AFP | Getty Photos
Taiwan Semiconductor Manufacturing Firm reported a third-quarter revenue of 211 billion New Taiwan {dollars} ($6.69 billion) on Thursday as weak demand for client electronics persists. Whereas that was the second straight quarter of revenue declines, the world’s largest contract chipmaker bested analyst expectations.
Listed below are TSMC’s third quarter outcomes versus Refinitiv consensus estimates:
- Income: 546.73 billion New Taiwan {dollars} ($17.28 billion), vs. NT$540.39 billion anticipated
- Internet revenue: NT$211 billion, vs. NT$191.43 billion anticipated
TSMC reported income slipped 10.83% from a 12 months in the past to NT$546.73 billion, whereas web revenue fell 24.87% from a 12 months in the past to NT$211 billion. That compares with TSMC’s steerage for third-quarter income between $16.7 billion and $17.5 billion.
“Our enterprise was supported by the sturdy ramp of our industry-leading 3-nanometer expertise and better demand for 5-nanometer applied sciences, partially offset by clients’ ongoing stock adjustment,” mentioned TSMC in its earnings report.
The chip big mentioned that income elevated 13.7% within the third quarter as in comparison with the second quarter.
Within the second quarter, the Taiwanese agency reported a decline in quarterly revenue for the primary time in 4 years because of a post-pandemic plunge within the demand for client electronics like smartphones and laptops. However analysts have mentioned inventories at smartphone and pc makers are working down and restocking demand is predicted to select up.
Through the earnings name on Thursday afternoon, CEO C.C. Wei mentioned that the agency expects inventories to proceed to say no.
“As a result of persistent weaker general macroeconomic circumstances and gradual demand restoration in China, clients stay cautious of their stock management. That is why we count on the stock digestion to proceed within the fourth quarter,” mentioned Wei.
TSMC is the highest producer of the world’s most superior processors. The Taiwanese agency manufactures semiconductors for firms like Apple and Nvidia, which can be usually based mostly on Arm structure.
TSMC at present manufactures 3-nanometer chips and plans to begin 2-nanometer mass manufacturing in 2025.
Smartphone market restoration
Canalys information confirmed that the worldwide smartphone market slid simply 1% in third quarter 2023, pointing to a slowdown in its decline. Within the second quarter, the market plummeted 11% in contrast with the identical interval a 12 months in the past.
“Bolstered by regional recoveries and new product improve demand, the smartphone market recorded a double-digit sequential development in Q3, forward of the gross sales seasons,” mentioned Canalys in a Tuesday report.
The demand for AI chips pushed has boomed led by the proliferation of enormous language fashions equivalent to ChatGPT and Chinese language clones. That is bolstered the shares of TSMC, which have surged 19% to date this 12 months.
Nevertheless, CEO Wei mentioned that AI demand is “not sufficient to offset” the weakening demand for chips in client electronics.
“Shifting into fourth quarter 2023, AI-related demand continues to be sturdy however it’s not sufficient to offset the general cyclicality of our enterprise,” mentioned Wei through the earnings name on Thursday.
“We count on our enterprise within the fourth quarter to be supported by the continued sturdy ramp [up] of our 3-nanometer expertise, partially offset by clients’ continued stock adjustment on the stock facet,” he mentioned.
Final week, the U.S. prolonged TSMC’s exemption from U.S. commerce sanctions on China, permitting it to proceed delivery superior chip tools for its operations there.
That is breaking information. Please test again for updates.
