Taiwan Semiconductor Dodges Chip Sector Weak spot

Taiwan Semiconductor Manufacturing (TSM), the world’s largest chip foundry, on Friday reported better-than-expected gross sales for September. The information got here after main buyer Superior Micro Units (AMD) warned that its third-quarter gross sales missed views on weak PC demand.

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Taiwan Semiconductor, higher often known as TSMC, reported the equal of $6.68 billion in September gross sales. Its income rose 42.6% in native forex yr over yr however fell 4.5% from August. TSMC posts leads to new Taiwan {dollars}.

TSMC’s gross sales for the third quarter totaled the equal of $20.2 billion. Analysts polled by FactSet had been searching for $19.7 billion. TSMC plans to report Q3 earnings subsequent Thursday.

Taiwan Semiconductor produces chips for fabless semiconductor corporations reminiscent of AMD, Apple (AAPL), Nvidia (NVDA), Qualcomm (QCOM) and others.

Taiwan Semiconductor Steering In Focus

“We do not consider TSMC is immune from deteriorating end-market circumstances, with AMD’s miss the newest reminder of weakening finish markets,” Wedbush Securities analyst Matt Bryson stated in a word to shoppers. “Nevertheless, we do assume that TSMC will outperform markets generally as a result of continued share features.”

Bryson charges Taiwan Semiconductor inventory as outperform.

Susquehanna Monetary Group analyst Mehdi Hosseini reiterated his impartial ranking on TSMC inventory.

In a word to shoppers, Hosseini stated he expects TSMC to decrease its income outlook and capital expenditure plans for 2023. He cited prospects coping with excessive inventories and weakening demand.

AMD Inventory Tumbles On Q3 Gross sales Miss

Late Thursday, AMD introduced preliminary outcomes for the third quarter that had been a lot weaker than forecast. It now expects income of $5.6 billion, vs. its prior goal of $6.7 billion. It blamed tender PC chip gross sales, which fell 40% yr over yr within the quarter.

Nevertheless, information middle, gaming and embedded chip gross sales grew considerably yr over yr and had been in keeping with expectations, AMD stated. Complete income rose 29% in Q3. It should report official outcomes on Nov. 1.

On the inventory market immediately, Taiwan Semiconductor inventory slid 6.2% to 69.75 amid an total tough day for shares. AMD inventory plummeted 13.9% to shut at 58.44.

The Philadelphia semiconductor index, often known as SOX, dropped 6.1% on Friday. The SOX contains the 30 largest semiconductor shares traded within the U.S. Yr thus far, the SOX is down 40.3%. Makers of reminiscence chips and PC processors have been hardest hit these days as a result of these segments have seen gross sales decline.

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

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