TSMC sees resilient chip sales boosting Q3; electronics demand cooling
By Yimou Lee and Ben Blanchard
TAIPEI (Reuters) -Taiwan’s TSMC forecast income progress that may very well be the best in 10 quarters, saying it was “extremely assured” about its long-term prospects and touted demand for high-tech chips utilized in knowledge centres and electrical autos.
The outlook from the world’s largest contract-chipmaker follows blow-out outcomes for the April-June interval that underscored resilient demand amid a chip crunch attributable to pandemic-fuelled gross sales of smartphones and laptops.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) is a serious Apple Inc provider and the outcomes are additionally testomony to demand for the iPhone 13 regardless of file international inflation and worries of a looming recession.
They’re more likely to ease some worries after a number of chipmakers, together with Micron Expertise Inc just lately sounded the alarm that chip shortages turned it a glut in some sectors, as hovering inflation and China’s COVID-19 curbs have squashed demand for electronics.
The outcomes helped European chip shares together with STMicroelectronics, and Infineon, buck a fall within the pan-European STOXX 600 index.
TSMC, whose purchasers embrace chip majors similar to Qualcomm Inc, additionally signalled that demand was cooling from client electronics prospects who would cut back chip stockpiles over the subsequent few quarters into 2023.
“After two years of pandemic-driven stay-home demand, this kind of adjustment is cheap in our view,” TSMC’s Chief Government Officer C. C. Wei informed an internet earnings briefing.
However he stated that long-term demand for TSMC’s chips was “firmly in place” and any upcoming down cycle wouldn’t be as huge as in 2008.
“Regardless of ongoing stock adjustment and macro uncertainties, the structural progress trajectory within the long-term semiconductor demand stays agency. We anticipate our capability to stay tight and our enterprise to be extra resilient.”
Different chipmakers similar to Samsung Electronics have additionally highlighted demand from data-centre prospects.
INFLATION BITES
TSMC stated its capital expenditures this 12 months will skim the decrease finish of its earlier steerage of $40 billion to $44 billion, with some bills pushed to subsequent 12 months due to a delay within the supply of some chip-making gear.
It additionally stated inflation posed a problem, echoing feedback from Intel Corp, which has stated it’s planning to boost chip costs due to rising prices.
In Might, Japan’s Nikkei enterprise every day reported TSMC had warned purchasers for the second time in lower than a 12 months that it deliberate to boost costs.
TSMC has not confirmed the report, saying as a substitute that its pricing was strategic, not opportunistic.
Shares in TSMC have fallen about 23% up to now this 12 months – valuing the agency at $408.3 billion – in contrast with a 35% droop within the Philadelphia Semiconductor index.
TSMC stated it anticipated third-quarter income to surge to between $19.8 billion and $20.6 billion from $14.88 billion a 12 months earlier. It raised its 2022 income progress forecast to mid-30s share from an earlier 26% to 29% vary.
Within the second quarter ended June 30, TSMC’s income rose 36.6%, and web revenue surged 76.4% – the largest bounce in eight quarters – handily beating market estimates.
TSMC’s web revenue for April-June rose to a file T$237.0 billion ($7.94 billion), above the T$219.13 billion common of 19 analyst estimates compiled by Refinitiv.
($1 = 29.8600 Taiwan {dollars})
(Reporting by Yimou Lee and Ben Blanchard; Writing by Sayantani Ghosh; Modifying by Christopher Cushing and Tomasz Janowski)
