TSMC expects ‘healthy growth year’ as Q3 profit beats expectations By Reuters

<p> <br />
</p>
<div>
<div>
<img decoding="async" alt="TSMC expects 'healthy growth year' as Q3 profit beats expectations" id="carouselImage" src="https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ9I069_L.jpg" style="visibility:hidden" /><br />
<span>© Reuters. A smartphone with a displayed TSMC (Taiwan Semiconductor Manufacturing Company) logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration</span><br />
<i class="imgGrad"/>
</div>
<p>By Sarah Wu and Yimou Lee</p>
<p>TAIPEI (Reuters) &#8211; Taiwanese chipmaker TSMC posted a 25% fall in third quarter net profit on Thursday, beating expectations, and said the semiconductor industry could be poised for recovery.</p>
<p>For the year ahead, the world&#8217;s largest contract chipmaker predicted healthy growth and a drop in industry inventory levels.</p>
<p>Demand for personal computers and smartphones, two of TSMC&#8217;s business drivers, is expected to lead the recovery, with artificial intelligence (AI) growth also increasing demand for its advanced chips and advanced packaging.</p>
<p>&#8220;We can expect 2024 to be a healthy growth year for TSMC,&#8221; CEO C.C. Wei told an earnings briefing, with the company expecting to &#8220;do better than the overall industry&#8221; next year.</p>
<p>&#8220;In these couple of months, we have started to see demand stabilise in the PC and smartphone end market&#8221; and inventory controls have become &#8220;more healthy than we thought&#8221;.</p>
<p>&#8220;Right now, do we see the bottom? Very close,&#8221; Wei said, but added it was too soon to say how strong the recovery would be as customers remain cautious because of macro weakness and China&#8217;s slow economic recovery. </p>
<p>Investors have watched for signs to gauge the strength of any recovery, as TSMC&#8217;s tool supplier ASML warned of flat 2024 sales on Wednesday, citing caution by chipmakers in new investment.</p>
<p>Given lingering uncertainty, TSMC said it has &#8220;appropriately tightened&#8221; its capital spending for this year to about $32 billion. Capital spending for the three months to September slid 13% from the previous quarter to $7.1 billion.</p>
<p>RIVAL SAMSUNG ELECTRONICS</p>
<p>The forecast-beating third quarter results from the tech bellwether follow better than expected quarterly profit from rival Samsung Electronics (KS:) earlier this month.</p>
<p>Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple (NASDAQ:) and Nvidia (NASDAQ:) supplier, said July-September net profit fell to T$211 billion from T$280.9 billion a year earlier.</p>
<p>The profit beat a T$195.5 billion LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.</p>
<p>TSMC, Asia&#8217;s most valuable listed company, said third quarter revenue dropped 14.6% to $17.3 billion, in line with the company&#8217;s previous forecast of $16.7 billion to $17.5 billion.</p>
<p>Revenue from the high performance computing segment, which includes high-end AI chips, accounted for 42% of its total sales, down from 44% in the previous quarter but up from 39% a year earlier.</p>
<p>Wei attributed the auto segment&#8217;s contraction to 5%, from 8% the previous quarter, to the industry adjusting inventory after three years of &#8220;very strong&#8221; demand. He said he expected demand to rise next year, as more electric vehicles hit the road. </p>
<p>As the leading manufacturer of advanced chips, TSMC must navigate an uncertain industry outlook and a U.S.-China chip spat that could make it vulnerable. </p>
<p>&#8220;The recent surge in AI-related demand supports our already strong conviction that demand for energy efficient computing will accelerate,&#8221; Wei said, adding the company has received strong customer interest in its 2-nanometre technology, which will be its most advanced and energy efficient. </p>
<p>As TSMC develops cutting-edge technology, Wei said the greatest challenge would be cost, as inflation drives up the price of chipmaking tools.</p>
<p>&#8220;I want to reduce cost so that more customers could afford it,&#8221; he said.</p>
<p>TSMC&#8217;s Taipei-listed shares fell 27.1% in 2022 but are up 22% so far this year, giving the chipmaker a market value of $432.3 billion. The stock rose 1.1% on Thursday versus a flat benchmark index. </p>
</div>
<p><br />
<br /><a href="https://www.investing.com/news/stock-market-news/tsmc-q3-profit-falls-249-beats-market-expectations-3202610">Source link </a></p><p>The post <a href="https://forextraderhub.com/tsmc-expects-healthy-growth-year-as-q3-profit-beats-expectations-by-reuters.html">TSMC expects ‘healthy growth year’ as Q3 profit beats expectations By Reuters</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>