To The Moon

Just now, TSMC $Taiwan Semiconductor Manufacturing(TSM)$ released released its first quarter results.

Measured in NT, the company's first-quarter revenue was 508.6 billion yuan, up 3.6% from a year earlier, and the market expects 518.5 billion yuan. Net profit is 206.9 billion yuan, up 2% from the same period last year, and the market is expected to be 194.2 billion yuan.

In fact, TSMC publishes monthly sales revenue every month, so the first-quarter revenue figures were no surprise. What really beat expectations was net profit.

However, in terms of US dollars, due to changes in the exchange rate, TSMC's revenue in the first quarter was $16.72 billion, down 4.8% from the same period last year, falling within the lower limit of the company's revenue guidance of $167m-17.5 billion, and net profit was $6.8 billion, down 6.3% from the same period last year:

As a cyclical industry, the decline in performance is inevitable. The last time TSMC had negative growth was in the first quarter of 2019, when the decline was as high as 16%.

However, from the perspective of the stock price trend, the negative growth was exactly the gold pit of the stock price!

The decline in performance is mainly due to a decline in demand for electronic products caused by macroeconomic weakness, and major semiconductor manufacturers are frantically destocking.

On a sequential basis, except for the slight growth of automotive chips, all other products showed a sharp decline, especially smartphones and HPC (high performance computing) performance:

According to IDC, PC shipments fell 29% in the first quarter of this year, the lowest in nearly a decade. Smartphones fell 12% year-on-year, the fifth consecutive quarter of negative growth.

HPC and smartphones account for 78% of TSMC's revenue. Autonomous driving chips, while growing, account for only 7% of revenue, making it hard to pull the company along:

Although revenue was sluggish, the profit side slightly exceeded market expectations, mainly due to the increase in the share of 5-nanometer revenue from 20% to 31% with more advanced manufacturing process, which led to a 0.7% increase in gross margin.

Looking ahead to the second quarter, the company expects revenue in the range of $15.2 billion to $16 billion, down about 11.9% to 16.3% year-on-year, slightly below market expectations of $16.1 billion; Gross margin is expected to be between 52% and 54%, compared with market expectations of 52.5%.

Revenue is expected to decline by low and medium single digits in 2023, and the company's plan to maintain full-year capital expenditure of $32 to $36 billion, which is expected to beat market expectations of $32.9 billion. This is good news for semiconductor equipment makers such as ASML $ASML Holding NV(ASML)$ .

On a price-to-earnings basis, TSMC PE(TTM) trades at 13 times, which is the lowest in the past seven years:

Up to now, TSMC, ASML and other semiconductor giants still believe that the second half of the revenue will be better than the first half of the year, so now is the bottom of the semiconductor industry, the past performance has been fully reflected in the stock price.

In the future, semiconductor industry may be led by AI to create a new record!