First time in 4 years, Chip maker TSMC faces profit decline

The world’s largest chip maker – Taiwan Semiconductor Manufacturing Company (TSMC) published a profit decline for the second quarter of 2023. Below you can check the Q2 2023 business results of TSMC.

• Revenue: 480.84 billion New Taiwan dollars ($15.68 billion), vs. NT$478.83 billion expected
• Net income: NT$181.8 billion, vs. NT$172.55 billion expected

The revenue decline of TSMS is 10% from a year ago to NT$480.84 billion, while net income fell 23.3% from a year ago to NT$181.8 billion. The company had previously forecast second-quarter revenue between $15.2 billion and $16 billion.

In terms of quarters, the Q2 revenue was $15.68 billion, which decreased 13.7% year-over-year and decreased 6.2% from the previous quarter. The gross margin for the quarter was 54.1%, the operating margin was 42.0%, and the net profit margin was 37.8%.

This is TSMC’s first quarterly downfall since the second quarter of 2019, marking the end of four years of robust growth.

The company revealed that its 5nm products accounted for 30%, 7nm for 23%, and other advanced tech for 53% of the total wafer revenue.

“Our second quarter business was impacted by the overall global economic conditions, which dampened the end market demand, and led to customers’ ongoing inventory adjustment,” said Wendell Huang, VP and Chief Financial Officer of TSMC. “Moving into the third quarter 2023, we expect our business to be supported by the strong ramp of our 3-nanometer technologies, partially offset by customers’ continued inventory adjustment.”

Forecast for Q3:

The chip maker also forecasted third-quarter revenue to draw between $16.7 billion and $17.5 billion.

(source – TSMC)