Tech

TSMC reports 80% quarterly profit spike year on year, strongest growth in 2 years


TSMC shares rose more than 4% on Friday morning, outperforming the broader market, after the Taiwanese chipmaker posted better-than-expected third-quarter profit, though it gave more cautious about upcoming demand.

Taiwan Semiconductor Manufacturing Co.TSMC), a major Apple The world’s largest supplier and contract chipmaker, on Thursday announced an 80% year-over-year increase in profits for the July-September 2022 period, the strongest growth yet. in two years.

However, the company also cut capital spending by at least 10% this year. TSMC, Asia’s most valuable listed company, said it was more cautious in its investment planning for 2023, but still expected “a year of growth”.

Analysts at Daiwa Capital Markets said investors should take advantage of the cheap shares – TSMC stock has fallen more than 30% so far this year – and noted that the company has given direction “Intact” lead for Q4 and 2023, despite capital cuts to optimize capacity amid widespread inventory adjustments.

“While this adjustment is likely to result in a suboptimal load for TSMC in the first half of the year, it is a good thing in our expectations and more importantly, we are consistent with our view.” We believe that TSMC this time will be counter-cyclical, with better weather than peers through this correction in 2023,” it said.

Morningstar said in a research note that TSMC stock is cheap for long-term computing growth, particularly growth for artificial intelligence, Internet of Things, and high-performance computing “that could drag for many decades”.

Shares of TSMC’s smaller Taiwanese competitor, United Microelectronics, were also up more than 4% on Friday morning. It reports third-quarter earnings on October 26.

© Thomson Reuters 2022


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