Today after the market closed, TSMC announced their January 2023 revenue of NT200.051bn, which represents an increase of 16.2% y-o-y and 3.9% growth m-o-m! This comes as a pleasant surprise as TSMC management had previously guided the market that its revenue in 1Q23 will decline 14.2% quarter over quarter at the midpoint guidance!
In particular, almost all of TSMC’s top clients such as Apple, AMD and Qualcomm are reducing chip production due to weak demand and inventory corrections across the end market. So, its very surprising that TSMC stands out among its peers in the technology industry.
TSMC’s sales growth momentum is rather uncommon in the current semi downcycle trend that is being experienced by many technology companies. Given this unexpected positive sales performance, investors may view TSMC as a company that is defying industry trends and demonstrating resilience in the face of a downcycle. TSMC's ability to generate revenue growth despite the challenging economic environment could indicate its strong market dominance and its massive technology economic moat!
As the world continues to rely on technology and digital solutions, the demand for TSMC's products and services is likely to remain high! One example would be the recent craze about ChatGPT AI. Investors seems to forgot one interesting aspect of the buzz surrounding ChatGPT AI that has gone largely unnoticed is the crucial role played by TSMC! As the only foundry capable of producing highly advanced AI chips, such as Nvidia's A100/H100, TSMC holds a unique position in this AI market! Additionally, TSMC is one of a limited number of foundries capable of handling advanced packaging for AI chips, further emphasizing its importance in the field. Overall, TSMC will be a beneficiary in this AI race between MSFT and Google!
Nvidia share price has rallied strongly from the ChatGPT hype, so hopefully TSMC’s monthly revenue today as well!
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