Business

Taiwan Semi reports better-than-expected profit


The third-party silicon wafer maker reported Taiwan Semiconductor Manufacturing Co. reported a stronger-than-expected 80% increase in profit in the third quarter.

The chip maker said earnings rose to NT$281 billion from NT$156 billion.

TSMC
TSM,
+ 1.04%

reported earnings of $1.79 per American deposit receipt compared with $1.08 per ADR for the period one year ago. Revenue in dollars rose 36% to $20.23 billion.

Analysts surveyed by FactSet had forecast earnings of $1.65 per ADR and revenue of $19.44 billion.

TSMC
2330,
-0.63%

Share trading in Taipei fell 0.6%.

According to FactSet, in the fourth quarter, TSMC executives posted revenue between $19.9 billion and $20.7 billion, while analysts came up with an average model of $19.84 billion. The company also guides operating margins between 49% and 51%.

TSMC supplies chipmakers that don’t have their own fabrication plants, known as fabs, such as Nvidia Corp.
NVDA,
-0.74%
,
Advanced Micro Devices Inc.
AMD,
+ 0.38%
,
and Apple Inc.
AAPL,
-0.46%
.
Some companies operate their own hubs such as Intel Corp.
INTC,
+ 1.16%
,
Micron Technology Inc.
MU,
-1.79%
,
and Texas Instruments Inc.
TXN,
-1.24%

TSMC shares beat Tuesday following a report that customers are canceling orders and fab’s fill capacity will decrease over the next six months. TSMC’s ADR is down nearly 47% this year.

Read: Chip stocks could be the worst hit of the year as the effects of shortages turn to widespread surpluses

The year has been particularly difficult for the semiconductor industry, with the PHLX semiconductor index down 44%.
NUMBER X,
-0.90%
,
The company currently has $332.48 billion TSMC is the largest by market capitalization among its 30 components. Taiwan-based third-party Hsinchu spent the year swapping that top spot with Nvidia, which is now valued at $283.35 billion and remains the largest U.S. chipmaker by value. market capitalization, along with Broadcom Inc.
AVGO,
-0.04%

at $180.85 billion.

Followed by the performance of the SOX index, compared to the S&P 500
SPX,
-0.33%

25% off and 33% off on the tech-heavy Nasdaq Composite Index
COMP,
-7.51%
.
Investor optimism dried up in semi-finals as analysts chase a trajectory threatens to make 2022 the worst year ever for chip-related stocks like PC shipments suffered the biggest drop on record.

Hours before TSMC reports earnings, Applied Materials Inc.
AMAT,
-0.38%
,
which supply fabs with complex machinery needed in cleanrooms, warn that extend restrictions on products they can sell to China it will be expensive revenue up to 1 billion dollars spread over a period of six months.

The company is the latest to join the “$1 billion group” that has formed in the past few months. Applied Materials’ warning follows a warning from one of the chipmakers that performed better this year, AMD, $1 billion less than forecast as sales to PC vendors plummeted, continuing a trend that has become $1 billion short this quarter.

Read: Chip stocks fall to two-year low on more tech, AI ban on China causes further calamity

At the end of September, memory chip maker Micron said the market was “unprecedented”. Loss of $1 billion dollars in their pocket during the quarter and at the end of August, Nvidia $1 billion cut from its forecast.

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