HomeBusinessTSM stock: Taiwan Semiconductor returns to growth with first-quarter profit

TSM stock: Taiwan Semiconductor returns to growth with first-quarter profit

Taiwanese semiconductor manufacturing (TSM), the world’s largest contract chipmaker, beat first-quarter expectations on Thursday. But TSM stock fell in early trading.


The chip foundry, better known as TSMC, earned $1.38 per U.S. share on revenue of $18.87 billion in the March quarter. Analysts polled by FactSet expected earnings of $1.30 per share on revenue of $18.31 billion. In the same period last year, TSMC earned $1.30 per U.S. share on revenue of $16.62 billion.

With its Q1 report, TSMC returned to revenue and profit growth after four consecutive quarters of year-over-year declines. Taiwan Semiconductor’s revenue rose 12.9%, while profit rose 6.2%.

For the current quarter, TSMC expects revenue of $19.6 billion to $20.4 billion. The $20 billion midpoint exceeded Wall Street’s target of $19.44 billion. In the second quarter of last year, TSMC generated revenue of $15.47 billion.

TSM shares fall after report

In premarket trading on the stock market today, TSM stock fell 2.2% to 136.

See also  Oil range limits as traders monitor Iranian and Saudi developments

TSMC’s customers include: Apple (AAPL), AMD (AMD), Nvidia (NVDA), Qualcomm (QCOM) and more.

“Our first quarter business was impacted by smartphone seasonality, partially offset by continued demand for high-performance computing (HPC),” Chief Financial Officer Wendell Huang said in a press release.

He added: “As we enter the second quarter of 2024, we expect our business to be supported by strong demand for our leading 3-nanometer and 5-nanometer technologies, partially offset by the continued seasonality of smartphones. ”

Circuit widths on chips are measured in nanometers, which is one billionth of a meter.

TSM stock has recently made a breakthrough

In the first quarter, shipments of 3-nanometer chips accounted for 9% of total wafer revenues, 5-nanometer 37% and 7-nanometer 19%. Advanced technologies, defined as 7-nanometer and smaller nodes, accounted for 65% of total wafer revenues.

TSMC slightly lowered growth expectations for the sector but maintained its business target, Barclays analyst Simon Coles said in a client note. The company reiterated its expectations for revenue growth in the low-to-mid 20% range, he said.

See also  Japan's net external assets reached a record high in 2023 and remains the world's largest creditor

“AI remains the bright spot” for Taiwan Semiconductor as the company sees a gradual recovery in most of its end markets this year, Coles said. He rates TSM stock as Overweight with a price target of 145.

On January 18, TSM stock broke out of the cup-with-handle base at a buy point of 105.52, according to IBD MarketSurge charts. The breakout occurred after TSMC delivered a fourth-quarter beat-and-raise report.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer tech, software and semiconductor stocks.


Super Micro Computer Stock Rockers, But Find Support at Key Level

Chip Designer Arm wants to reduce the power consumption of data centers

Chip Gear giant ASML misses first quarter revenue target and offers soft prospects

MarketSurge: research, charts, data and coaching all in one place

View stocks on the leader list near a buy point

- Advertisement -


Please enter your comment!
Please enter your name here

Most Popular

Recent Comments