TSMC's ramp-up in 3-nanometer node production, AI and server-related high-performance-chip (HPC) fabrication orders will be key areas of focus in the 1Q earnings report following a disappointing 15.4% decline in March sales.
Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker and a major Apple Inc supplier, is scheduled to announce Q1 earnings results before the market opens on Thursday, April 20th. The Bloomberg consensus revenue estimate is $17.093B, the consensus adjusted net income estimate is $6.393B, and the consensus EPS estimate is $1.234.
Latest Results
TSMC posted a 78% rise in fourth-quarter net profit in Q4, as strong sales of advanced chips helped it defy a broader industry downturn that battered cheaper commodity chips. TSMC saw net profit for October-December rise to T$295.9 billion ($9.72 billion) from T$166.2 billion a year earlier. Revenue for the fourth quarter climbed 26.7% to $19.93 billion.
Q1 Guidance
Based on current business outlook, TSMC management expects revenue to be between US$ 16.7 billion and US$ 17.5 billion.
Based on the exchange rate assumption of 1 US dollar to 30.7 NT dollars, management expects: Gross profit margin to be between 53.5% and 55.5%; Operating profit margin to be between 41.5% and 43.5%.
First Revenue Drop in Four Years
Taiwan Semiconductor Manufacturing Co. said on Monday(April 10) that its revenue fell 15% in March from a year earlier, marking the first drop in nearly four years.
TSMC said that revenue fell to 145.41 billion new Taiwan dollars (US$4.78 billion) from NT$171.97 billion in March 2022. That is its first monthly revenue fall since May 2019.
First-quarter revenue rose 3.6% from a year earlier to NT$508.63 billion (US$16.73 billion).
In January, TSMC Chief Financial Officer Wendell Huang had said that business in the first quarter would likely be affected by softness in end-market demand and customers' inventory adjustment as macroeconomic conditions remained weak.
TSMC had projected first-quarter revenue of between US$16.7 billion and US$17.5 billion, down from US$19.93 billion in the fourth quarter.
3-Nm, HPC Orders Keys to Defy Inventory Woes
TSMC's ramp-up in 3-nanometer node production, AI and server-related high-performance-chip (HPC) fabrication orders will be key areas of focus in the 1Q conference call following a disappointing 15.4% decline in March sales. These factors will determine whether the company can maintain revenue-growth momentum in 2023, as consensus suggests, and counter a semiconductor-sector outlook clouded by weaker-than-anticipated smartphone and PC demand, along with stagnant inventory-reduction progress.
The March sales decline suggests an underutilization of capacity, particularly in advanced node. Gross profit in 1Q might have shrunk 0.4%, based on our scenario, which assumes a gross profit margin of 53.5%. That would put profit at the lower end of guidance and short of the consensus 4.1% increase.
