Taiwan Semiconductor Manufacturing
lifted some of the gloom around the chip sector on Thursday with an earnings beat. The world’s largest contract chip manufacturer gave an upbeat outlook heading into 2024 which could be good for Intel and other semiconductor makers.
TSMC
(ticker: TSM) said that demand for the latest chip technology was helping to offset a glut of semiconductors caused by the fall in demand for consumer electronics. While its third-quarter revenue fell 11% from the same period a year earlier, it was up 14% from the preceding quarter.
TSMC dominates the market for high-end chips. It makes the main processors inside
Apple
(ticker: AAPL) iPhones,
Qualcomm
(QCOM) mobile chipsets, and processors made by
Advanced Micro Devices
(AMD).
TMSC said its third-quarter net profit came to 211.0 New Taiwan dollars ($6.51 billion), ahead of expectations of 190.94 billion New Taiwan dollars, according to a FactSet consensus. Revenue in U.S. dollars came to $17.3 billion.
For the fourth quarter, TSMC projected revenue would rise to a range of $18.8 billion-$19.6 billion,
“Moving into fourth quarter 2023, we expect our business to be supported by the continued strong ramp of our 3-nanometer technology, partially offset by customers’ continued inventory adjustment,” TSMC’s Chief Financial Officer Wendell Huang said in a statement.
TSMC said revenue from customers in North America made up 69% of the total revenue, up from 66% in the second quarter. The company is investing $40 billion into manufacturing sites in Arizona, which will supply chips to Apple from 2025.
American depositary receipts of TSMC were up 2.1% in premarket trading.
TSMC’s report was in line with better-than-expected results from chip-manufacturing rival
Samsung Electronics
(005930.Korea) earlier this month which suggested the worst of the inventory glut caused by the slowdown in PC and smartphone sales might be easing.
The reports could bode well for their U.S. peer
Intel
(INTC), which will release its own earnings next Thursday after the close of markets. Intel shares were down 0.2% in premarket trading, with broader technology indexes also down amid elevated bond yields.
Write to Adam Clark at [email protected]
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