TSMC Q1’ FY23 Earnings Summary

The company's net income increased 2.1% to T$206.99 billion, surpassing Reuters' estimated profit of T$192.5 billion. Net sales also grew 3.6% to T$508.63 billion, landing at the lower end of the January forecast range. As for EPS, it rose to T$7.98, compared to T$7.82 in the previous year.

But their sales and net income experienced a significant decline (their smallest growth since mid-2019) from the previous quarter, signaling a slowdown in semiconductor demand as the global economy worsened.

The executives also highlighted that a decline in demand observed in the Q4 results prompted a decrease in capital expenditure for 2023, which now falls between $32 billion and $36 billion, down from $36.3 billion in the prior year.

As a whole, the company anticipates its business to hit its lowest point in Q2 before recovering, but believes its business will recover in the second half as more businesses adopt AI, driving up the need for computing infrastructure. Considering a surge in development following OpenAI’s ChatGPT, which could fuel the demand for high-end chops further. 

Adding to that, the investor sentiment has also been dampened by political risks arising from Taiwan-China tensions. In response to that, TSMC plans to move production out of Taiwan, with a $40 billion factory in Arizona.

Drop me a Like if you enjoyed this read - stay tuned for more!