- Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest microchip maker, posted second-quarter results with revenue of NT$480.84 billion ($15.68 billion) and net income of NT$181.8 billion ($5.82 billion), both slightly exceeding expectations. Diluted earnings per share came in at NT$7.01 (US$1.14 per ADR unit).
- The company attributes the fall in profit to macroeconomic challenges as well as to customer inventory adjustments. The gross margin for the quarter was 54.1%, with the operating margin at an impressive 42.0%, and the net profit margin an incredible 37.8%.
- Despite a 10% revenue dip and a 23.3% decline in net income from a year ago, TSMC said it is optimistic about the future. It expects the third quarter to be supported by the strong ramp of its 3-nanometer technologies and potential chip orders from Apple for their next iPhone.
- For the third quarter of 2023, TSMC expects revenue between US$16.7 billion and US$17.5 billion, with a gross profit margin between 51.5% and 53.5% and an operating profit margin between 38% and 40%.
- TSMC’s position as a key chip supplier for Apple’s iPhones, with its sticky customer base, bolsters TSMC’s potential for continued growth, despite the post-pandemic consumer electronics slump. Smartphone vendors are prioritizing new launches by clearing out old inventory, contributing to the positive market outlook. Overall, TSMC remains the leader in chip manufacturing, and is the worlds 10th largest company by market capitalisation, at half a trillion US dollars. We are owners of the share for clients in managed portfolios and Cratos BCI Worldwide Equity Fund. By Lee Kern
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