TSMC Sees Stable Chip Sales Boosting Q3; Electronics need cooling

Taiwan Semiconductor Manufacturing Co (TSMC) logo is pictured at its headquarters in Hsinchu, Taiwan, 19 January 2021. REUTERS/Ann Wang

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  • Third-quarter revenue increases to $19.8-$20.6 billion from $14.88 billion year-over-year
  • Confident about the long-term demand for chips
  • Q2 profit of T$237.0 billion vs. T$219.13 billion analyst opinion
  • Second-quarter revenue rose 36.6% year over year to $18.16 billion

TAIPEI, July 14 (Reuters) – Taiwan’s TSMC (2330.TW) forecast revenue growth that could be the highest in 10 quarters and said it was “very confident” about its long-term prospects and touted demand for high-tech -Chips used in 5G networks and artificial intelligence.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chip maker and a key supplier to Apple Inc. (AAPL.O), said it expects third-quarter revenue to range between US$19.8 billion and US$20.6 billion -dollar will increase from $14.88 billion last year.

In the second quarter ended June 30, TSMC’s revenue rose 36.6% and net income rose 76.4% — the largest jump in eight quarters and comfortably beating market estimates.

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The strong results and outlook underscore sizzling demand for TSMC’s chips amid a two-year global shortage and allayed some doubts after several chipmakers, including Micron Technology Inc (MU.O), recently sounded sudden flood alerts. Continue reading

They’re also evidence of demand for Apple’s iPhone 13 despite record global inflation and fears of a looming recession. Smartphone sales at other companies like market leader Samsung Electronics Co Ltd have slumped after a pandemic-driven surge in demand. Continue reading

Long-term demand for chips “remains firm,” said CC Wei, chief executive officer of TSMC, in an online earnings briefing. He said he expects capacity utilization at the company’s chip fabs to remain “healthy” over the next year.

TSMC, whose clients also include chip majors like Qualcomm Inc (QCOM.O), raised its revenue growth expectations for 2022 to more than 30% from a previous forecast of around 26% to 29%.

Still, TSMC said capital expenditures will fly past the low end of its earlier guidance of $40 billion to $44 billion as it faces rising raw material costs.

It signaled that demand for consumer electronics chips was cooling and that customers are expected to start reducing chip inventories in the next few quarters through 2023.

TSMC said net income for April-June rose to a record T$237.0 billion (US$7.94 billion). That beat the average of T$219.13 billion from 19 analyst estimates compiled by Refinitiv.

TSMC’s shares are down about 23% so far this year, giving the company a market value of $408.3 billion. The stock was up 1% on Thursday, compared to a 0.8% gain for the benchmark index (.TWII).

($1 = 29.8600 Taiwan Dollars)

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Reporting by Yimou Lee and Ben Blanchard; Writing by Sayantani Ghosh; Editing by Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.

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