A slump in the semiconductor sector may be about to recover, according to Taiwanese chipmaker TSMC (2330. TW), which on Thursday reported a smaller-than-expected 25% decline in third-quarter net profit and said it saw signs of stability.
The biggest contract chip manufacturer in the world expressed optimism for the next year and forecast strong growth and decreased inventory levels in the sector. The need for personal computers and smartphones, two of the tech giant’s key revenue generators, is anticipated to drive its recovery. At the same time, the development of artificial intelligence will keep driving demand for TSMC’s cutting-edge chips and packaging.
According to CEO C.C. Wei, the firm anticipates having a “healthy growth year in 2024” and performing “better than the overall industry” in that time frame.
Inventory controls have become “more healthy than we thought,” demand in the PC and smartphone end markets has stabilized in the last several months. “Do we now see the bottom? Very close, Wei said, adding, “It’s too soon to call it a sharp comeback.
Investors have been keenly monitoring any indicators to better assess any rebound strength after TSMC’s major supplier ASML (ASML.AS) on Wednesday issued a warning about flat sales in 2024, citing chipmakers’ reluctance in new investment.
TSMC has “appropriately tightened” its capital investment for this year to roughly $32 billion as long as market uncertainty persists shortly, according to Wei. The $7.1 billion in capital expenditures for the three months ending in September was a 13% decrease from the prior quarter.
The IT heavyweight’s third-quarter results topped expectations, and earlier this month, rival Samsung Electronics (005930. KS) also posted better-than-anticipated quarterly profits.
Major Apple (AAPL.O) and Nvidia (NVDA.O) supplier Taiwan Semiconductor Manufacturing Co Ltd (TSMC) said the July-September net profit decreased to T$211 billion from T$280.9 billion a year earlier. The gain exceeded a T$195.5 billion LSEG SmartEstimate, which gives more weight to expert estimates that are more reliably correct.
The most valuable publicly traded business in Asia, TSMC, reported a 14.6% decline in third-quarter sales to $17.3 billion, in line with the firm’s earlier expectation of $16.7 billion to $17.5 billion.
High-end AI chips are included in the high-performance computing category, which contributed 42% of the company’s total sales in revenue, down from 44% in the previous quarter but up from 39% a year earlier.
As the largest manufacturer of cutting-edge semiconductors, TSMC must negotiate a hazy market picture and a potential chip war between the United States and China. The market capitalization of TSMC, a chipmaker, is $432.3 billion after shares of the Taipei-listed company rose 22% so far this year after falling 27.1% in 2022. On Thursday, the stock increased 1.1% compared to a flat benchmark index (.TWII).
Comment Template