Taiwan Semiconductor Revenue Questions Outlook

There was good news and bad news for tech investors.

the company report Second quarter sales were slightly higher than expected, and while the global chip shortage continues into next year, it could improve slightly over the next few months. However, the high demand that contributed to the shortage was for double-edged swords. The rate of return increases as the firm increases production, and Foreign cash investment It poured into Taiwan’s financial markets and raised the local currency. The operating result was lower than expected.

U.S. certificates of deposit traded in the U.S. by Taiwan Semiconductor (ticker: TSM) fell 5.5% to $ 117.53 on Thursday. Other flea-related stocks also fell.

Concerns about the profitability of Taiwan’s semiconductors might have come as a wider surprise to investors, as other chip stocks fell as well.


NXP semiconductors

r (NXPI),

Nvidia

(NVDA), and

Microchip technology

(MCHP) Everything was closed at more than 4%. The PHLX Semiconductor index fell 2.2%, but

Nasdaq Composite Index,

Tech stocks dominate, down 0.7%.

S&P 500

It was 0.3% off.

The world’s largest contract semiconductor manufacturer This net profit says Revenue rose 20% to NT $ 372 billion, an increase of 11% to NT $ 134 billion ($ 4.8 billion), or NT $ 5.18 per share listed in Taiwan. Profits were slightly lower than analyst’s forecast of adjusted NT $ 5.23, but profits were above NT $ 371.7 billion.

Chip maker

Apple,


Advanced micro-systems,

And

Intelligence

He said second quarter results were driven by high performance computing and automotive demand. Revenues in both areas grew 12% quarter on quarter. The company’s sales in all end markets grew at a double-digit rate.

Smartphones made up around 42% of total revenue, and high performance computing made up around 39% of revenue.

Taiwan Semi continues to add capacity at an astonishing rate across its chip manufacturing portfolio, from advanced processors to less sophisticated chips for applications such as automotive components, while the leaders are global. He said the shortage will continue until 2022. Good news for automakers. The company increased the capacity of these chips by 60%, helping to alleviate the shortfall in the third quarter.

However, for the first time since the second quarter of 2019, Taiwan Semi’s operating profit fell below expectations, reaching NT $ 145.7 billion as analysts expected NT $ 150 billion. Operating profit (also known as operating profit) measures the profitability of a primary business, excluding items such as interest and taxes, and can be viewed by investors as a more accurate indicator of business performance.

Taiwan Semi executives said in a statement in announcing their results that the strength of the Taiwan dollar was hampering earnings. This is in part the result of the company’s success as an exporter. A rise in the Taiwan dollar will reduce the value of profits made abroad in the local currency.

The company’s earnings outlook also gave investors little reason to support it. Executives say the third quarter gross margin is expected to average 50.5%, about 2% below Wall Street expectations.

Executives said Thursday the company continues to pass the increased costs on to its customers. Chip prices generally decline over time as manufacturers improve their efficiency. But this year, Taiwan Semi hasn’t cut prices as usual, according to executives at a chip company that deals with manufacturers of consignment products.

According to Taiwan Semi, third-quarter sales are expected to increase by about 20%, from $ 14.6 billion to $ 14.9 billion. The midpoint of that range is just below the consensus estimate of $ 14.8 billion. (The company issued guidelines in US dollars.)

Executives did not renew investors on the company’s $ 30 billion annual investment plan. Pierre Ferragu, analyst at New Street Research, predicted that Taiwan Semi would generate $ 10.1 billion in free cash flow this year. He said the company could take it to $ 30 billion and generate $ 100 billion in annual revenue after 2025.

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