TSMC expects 27% fall in Q2 earnings, Q3 looks better

Taiwanese chipmaker TSMC is anticipated to report a 27% fall in second-quarter internet revenue on Thursday, as world financial woes dent demand for semiconductors, although analysts say business efficiency is probably going to enhance within the present quarter.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker and a serious Apple and Nvidia provider, is prone to report internet revenue for the April-June interval of T$172.53 billion ($5.58 billion), down from T$237.0 billion a 12 months earlier, based on the common of 21 analysts polled by Reuters.

The forecast decline in revenue partly displays a sturdy efficiency within the earlier 12 months, when the corporate was nonetheless using excessive on pent-up post-pandemic demand.

Analysts at Taiwan’s Fubon Investment mentioned they anticipated the second quarter to be the underside of the present downcycle however that whereas the state of affairs ought to enhance within the third quarter, it could be weaker than regular given continued stock construct ups which are nonetheless being labored via.

One senior Taiwan fund manger advised Reuters that third quarter revenue would bounce again given expectations for AI demand and launches of latest iPhones forward of the year-end vacation procuring season.

“Taiwan has not really benefited from electric vehicles, since the market is in China and most EV suppliers are in China. But artificial intelligence (AI) is a different story,” he mentioned, requesting anonymity citing firm coverage. “Taiwan will benefit most from AI because the entire AI supply chain can be found here.”

The second quarter is historically a sluggish interval for gross sales for the tech trade with demand often choosing up within the third quarter and in the direction of the year-end procuring season. TSMC, Asia’s most precious listed firm, posted a shock rise in internet revenue for the quarter ended March, up 2% from a 12 months earlier. But that was nonetheless the smallest quarterly development since mid-2019 as world financial woes damage demand for chips.

Last month, the corporate mentioned shortly rising demand for AI purposes was driving a variety of orders and that it anticipated a greater efficiency within the second half than the primary.

The vivid outlook for AI purposes has partly pushed up TSMC’s Taipei-listed inventory by virtually 30% thus far this 12 months, outperforming the broader market, which is up round 22%.

The firm will present steerage for the third quarter and replace earlier forecasts on its earnings name at 0600 GMT on Thursday.

TSMC’s second quarter income got here in at T$480.8 billion($15.53 billion), based on Reuters calculations, in the course of an April forecast vary of $15.2 billion to $16 billion, in comparison with $18.16 billion for the year-ago interval.

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