How will TSMC perform in 2Q22 after being cut orders？

Wise Shark joined discussion · Jul 12, 2022 16:14

$Taiwan Semiconductor (TSM.US)$ is expected to report FY22Q2 earnings on July 14 at 2:00 AM ET. Haitong International believes its UTR downturn is likely to be shallow. The Bloomberg consensus estimate for Micron’s revenue is $17.515 billion, up 40.2% YoY, and the net income is $7.366 billion, up 60.3% YoY.

Key Takeaways：

1. Bloomberg: TSMC 2Q growth likely to exceed expectations by 5%

(1) US Dollar vs. Taiwan Dollar Average Exchange Rate Appreciated to 29.7, 3% More Than 28.8 Set in Guidance.TSMC's 2Q sequential sales growth should exceed the consensus estimate of 5% and hit the upper range of guidance of NT$506.88-NT$524.16 billion, supported by continued full-capacity operation and stronger-than-expected US dollar appreciation against the Taiwan dollar.

(2) Robust demand for high-performance computing and automotive chips should prevail, while negative impacts from a weaker smartphone-chip demand outlook may not kick in until 4Q. The operating margin may also hit 47%, the higher end of its guidance range.

(3)Whether TSMC will adjust its 15-20% long-term sales growth target and capital spending on mature nodes in the face of accelerating inflation and weaker global consumer consumption sentiment will be key focuses at the 2Q results briefing.

2. Haitong International: the UTR pull-back is a very shallow one till the end-2022

(1) 2Q22 revenue is expected to be NT$547bn (+11% QoQ), and 3Q22’s to be NT$580bn (+6% QoQ), both of which are in line with market expectations.

(2) The supply chain survey suggests that Apple trimmed 2H22 wafers by 3-4%, AMD trimmed PC/GPU chips, and NVDA cut 5nm/7nm. Together with a QoQ wafer-input downtrend of QCOM/MTK, we expect TSMC’s 7nm UTR to fall to 95% in 4Q22, while other 12” nodes to be at ~100%; meanwhile, 8” UTR will turn loose starting Aug-2022, with the UTR of TSMC and other foundries falling to 98-99% and 90-95%.

Business Expectations and Rating:

Bloomberg's consensus estimates for TSMC's FY22Q2 results are revenue of NT$521.8 billion (US$17.515 billion), up 40.2% YoY; adjusted net income of NT$219.445 billion (US$7.366 billion)， up 63.3% YoY; and adjusted earnings per share of 0.284, up 63.6% YoY.