To The Moon

Just now, $Taiwan Semiconductor Manufacturing(TSM)$ released its third quarterly results, with revenue and profit exceeded expectations, and US stock market shares rose 2.4% before trading.

Specifically, TSMC's revenue in the third quarter was $17.28 billion, down 14.6% from a year earlier. In New Taiwan dollars, revenue NT$546.7 billion, slightly exceeding analyst expectations of NT$537.3 billion:

By business, smartphones contributed 39% of revenue in the third quarter, HPC (High performance computing) contributed 42%, and autonomous driving contributed 5% :

Compared with the second quarter, the growth rate of smartphone, HPC and IOT business increased, and the automatic driving business declined quarter-on-quarter, mainly due to the impact of car factory destocking:

According to the production process, the most advanced 3 nm process contributed 6% of revenue, 5 nm contributed 37%, 7 nm contributed 16%, and 7 nm and below advanced process processes combined contributed 59% of revenue, setting a record:

In general, it will significantly improve TSMC's profitability when the advanced technology is mass-produced on a large scale, because only TSMC and Samsung in the world can master the 3-nanometer production process, and TSMC's yield is higher than that of its rivals.

Therefore, advanced technology can not only improve profit margins, but also has a strong bargaining power, so the higher the proportion of advanced technology, the higher the proportion of advanced technology. The valuation of TSMC is expected to rise to a higher level.

Affected by the depreciation of the New Taiwan Dollar against the US dollar, and the increase in capacity utilization, TSMC's gross profit margin reached 54.3% in the third quarter, exceeding the upper limit of 51.5% and 53.5% given by management, significantly higher than the 52.8% expected by analysts:

During the earnings call, management saw signs of stabilization in demand for smartphones and PC, which are TSMC's biggest sources of revenue, and they saw that healthy growth will come in 2024.

Autonomous driving chips are in the inventory adjustment stage, and management believes that demand will grow again in 2024, taking into account the development potential of new energy vehicles.

Looking ahead to the fourth quarter, TSMC believes that revenue will reach $18.8-19.6 billion, a year-on-year decline of 1.7% to 5.7%, significantly narrower than the decline of about 14% in the second and third quarters.

The gross margin for the third quarter is expected to be between 51.5% and 53.5%, with full-year capital expenditure of $32 billion, which is within the lower limit of the previous guidance.

At present, the semiconductor winter has passed, a new round of growth has fallen to, and TSMC's price-to-book valuation still has room to rise;

The footsteps of the return of the king in the semiconductor industry are getting closer and closer!