TSM Inventory: Taiwan Semiconductor Beats Q3 Earnings Goal

Taiwan Semiconductor Manufacturing (TSM), the world’s largest chip foundry, on Thursday beat expectations for third-quarter earnings. It additionally guided greater for the present interval. TSM inventory rose in early buying and selling on the information.


Taiwan Semi earned $1.08 per U.S. share within the September quarter, up 17% from the year-earlier interval. Analysts anticipated earnings of $1.04 a share, based on FactSet. The corporate’s gross sales elevated 23% to $14.88 billion.

For the fourth quarter, Taiwan Semi forecast income of $15.4 billion to $15.7 billion. The midpoint of $15.55 billion topped Wall Road’s consensus estimate of $15.43 billion, based on FactSet. Its gross sales within the year-earlier interval had been $12.93 billion.

Taiwan Semi expects a gross revenue margin of 51% to 53% within the fourth quarter. Its gross margin within the third quarter was 51.3%, an enchancment from 50% within the second quarter.

TSM Inventory Rises

In premarket buying and selling on the inventory market right now, TSM inventory climbed 4.1% close to 114.45.

“Our third-quarter enterprise was primarily supported by robust demand throughout all 4 progress platforms, that are smartphone, HPC (high-performance computing), IoT (Web of Issues) and automotive-related purposes,” Chief Monetary Officer Wendell Huang mentioned in a information launch.

He added, “Transferring into fourth quarter 2021, we count on our enterprise to be supported by robust demand for our industry-leading 5-nanometer expertise.”

Within the third quarter, shipments of 5-nanometer chips accounted for 18% of whole wafer income at Taiwan Semi. In the meantime, 7-nanometer chips accounted for 34% of wafer income. Superior applied sciences, outlined as 7-nanometer and extra superior applied sciences, accounted for 52% of whole wafer income. Circuit widths on chips are measured in nanometers, that are one-billionth of a meter.

Taiwan Semi makes chips for a number of fabless semiconductor companies together with Apple (AAPL), AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

Taiwan Semi A Laggard

Regardless of the optimistic third-quarter outcomes, Taiwan Semi famous some softening in smartphone and PC demand heading into the fourth quarter. That would weigh on near-term sentiment for TSM inventory, Cowen analyst Krish Sankar mentioned in a notice to purchasers. He charges TSM inventory as market carry out.

Since hitting a document excessive of 142.20 on Feb. 16, TSM inventory has been an underperformer. It has an IBD Relative Energy Score of 27 out of 99.

TSM inventory ranks No. 18 out of 39 shares in IBD’s chipmaker {industry} group, based on IBD Inventory Checkup. It has a middling IBD Composite Score of 59 out of 99. IBD’s Composite Score combines 5 separate proprietary rankings into one easy-to-use score. The very best progress shares have a Composite Score of 90 or higher.

Comply with Patrick Seitz on Twitter at @IBD_PSeitz for extra tales on client expertise, software program and semiconductor shares.


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