TSM Inventory: Taiwan Semiconductor Defies Chip Sector Weak point

Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, on Thursday beat Wall Road’s targets for the third quarter and guided greater for the present interval. The information comes amid warnings from different chipmakers of weakening demand. TSM inventory rose in early buying and selling.

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Taiwan Semi, higher often called TSMC, earned $1.79 per U.S. share on gross sales of $20.23 billion within the September quarter. In the meantime, analysts polled by FactSet anticipated TSMC earnings of $1.65 a share on gross sales of $19.44 billion. On a year-over-year foundation, TSMC earnings jumped 67% whereas gross sales superior 36%.

For the present quarter, TSMC forecast gross sales of $19.9 billion to $20.7 billion. The midpoint of $20.3 billion tops analysts’ consensus estimate for $19.84 billion. Within the year-ago interval, it generated gross sales of $15.85 billion. Moreover, its steerage implies fourth-quarter gross sales progress of 28%.

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

TSM Inventory Rises On Quarterly Report

In premarket buying and selling on the inventory market at this time, TSM inventory climbed 2.8% to 65.88.

“Our third-quarter enterprise was supported by robust demand for our industry-leading 5-nanometer applied sciences,” Chief Monetary Officer Wendell Huang stated in a information launch.

He added, “Transferring into fourth quarter 2022, we anticipate our enterprise to be flattish, because the end-market demand weakens, and clients’ ongoing stock adjustment is balanced by continued ramp-up for our industry-leading 5-nanometer applied sciences.”

Circuit widths on chips are measured in nanometers, that are one-billionth of a meter.

Within the third quarter, shipments of 5-nanometer chips accounted for 28% of TSMC’s whole wafer income whereas 7-nanometer chips accounted for 26%. TSMC defines 7-nanometer and smaller nodes as superior applied sciences.

TSMC Referred to as ‘Final Man Standing’

In current weeks, AMD, Nvidia and different chipmakers have lowered their gross sales and earnings targets.

“TSMC’s robust Q3 2022 outcomes may earn it the ‘final man standing’ moniker given the present sector backdrop,” Josep Bori, thematic analysis director at GlobalData, stated in a observe to shoppers. “From the Intel and Nvidia revenue warnings to newer adverse outlooks from Samsung, AMD, Kioxia, and Micron, it’s clear that semiconductor demand is dropping momentum. But, TSMC managed to ship progress and supply an outlook above market expectations.”

TSM inventory ranks No. 15 out of 33 shares in IBD’s semiconductor manufacturing {industry} group, in response to IBD Inventory Checkup. Additional, it has a mediocre IBD Composite Score of 62 out of 99.

However Wedbush Securities analyst Matt Bryson reiterated his outperform, or purchase, ranking on TSM inventory.

“Whereas TSMC is clearly not resistant to macro results, we proceed to see the corporate as higher positioned to work by way of any points in mild of continued share good points tied largely to the corporate’s management on superior nodes,” Bryson stated in his observe to shoppers.

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

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