TSMC - Better quarters ahead?

Fast forward to Q2'23, and these guidance seem to hold ground as TSMC's results were in line with their guidance. However, share prices corrected downwards even with the AI boom.

So what else should investors be aware of from their latest earnings?

Revenue shrunk 5.5% YoY in NT$ billions. The company cited softening of overall global economic conditions has dampened the end market demand. There are ongoing inventory adjustments on their customers' side.

From a margin perspective, the percentage points were also lower than in Q1'23 due to lower capacity utilization and higher electricity costs.

This however was partially offset by stringent cost controls and more favourable foreign exchange rates.

Although the revenue outlook for Q3'23 looks to improve versus Q2'23, gross margins will slump down to a region of 51.5% - 53.5%.

Not only that, the operating margin is also slated to drop to between 38%-40%.

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