Taiwan Semiconductor Manufacturing Company (TSMC) announced its third-quarter profit, totaling 211 billion New Taiwan dollars ($6.69 billion), on Thursday, reflecting the ongoing weak demand for consumer electronics.
Despite experiencing its most significant profit decline since the first quarter of 2019, TSMC surpassed analysts’ expectations for the quarter.
Here is a breakdown of TSMC’s third-quarter results compared to Refinitiv consensus estimates:
- Revenue: 546.73 billion New Taiwan dollars ($17.28 billion), exceeding the expected NT$540.39 billion.
- Net income: NT$211 billion, surpassing the anticipated NT$191.43 billion.
TSMC reported a 10.83% drop in revenue compared to the same period last year, totaling NT$546.73 billion, while net income decreased by 24.87% year-on-year, amounting to NT$211 billion. These figures are in line with TSMC’s guidance for third-quarter revenue, which ranged between $16.7 billion and $17.5 billion.
TSMC attributed its performance to the strong adoption of its industry-leading 3-nanometer technology and increased demand for 5-nanometer technologies, although this growth was partly offset by ongoing customer inventory adjustments.
The chip manufacturing giant reported a 13.7% increase in revenue for the third quarter compared to the previous quarter.
During the earnings call, TSMC’s CEO C.C. Wei expressed expectations for continued inventory reduction, citing persistent weak macroeconomic conditions and cautious inventory management by customers, especially in the Chinese market. Despite these challenges, Wei noted early signs of demand stabilization in the PC and smartphone markets.
TSMC, known for producing the world’s most advanced processors, manufactures semiconductors for major companies like Apple and Nvidia, often based on Arm architecture. The company is currently producing 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025.
In terms of the smartphone market, Canalys data indicated a notable recovery, with the global smartphone market experiencing only a 1% decline in the third quarter of 2023, marking a slowdown in its previous decline. In the second quarter, the market had witnessed an 11% decline compared to the same period the previous year. Canalys attributed this recovery to regional rebounds and increased demand for new product upgrades, positioning the smartphone market for growth ahead of sales seasons.