TSM Reports 25% Fall in Q3 Net Profit

Taiwan Semiconductor (TSM) recently released its third-quarter financial results, reporting a 25% decline in net profit to NT$211 billion (approximately $6.7 billion). The company's sales also fell by 11% to NT$546.73 billion ($17.3 billion). However, TSM exceeded analyst estimates, with earnings of $1.26 per U.S.-listed share, surpassing the expected $1.15 per share.

Operating Margin Surpasses Expectations

Despite the decline in profit and sales, TSM's operating margin outperformed their own expectations, reaching 41.7%, compared to the projected range of 38% to 40%. This positive achievement indicates the strength of their business in the face of overall market cyclicality.

Fourth Quarter Projections

For the fourth quarter, TSM forecasts revenue between US$18.8 billion and US$19.6 billion, with an operating margin expected to range from 39.5% to 41.5%. According to analysts polled by FactSet, the anticipated revenue is slightly higher, at $18.54 billion.

Market Conditions and Demand Stabilization

Taiwan Semiconductor attributes the decline in profit and sales to weaker macroeconomic conditions and slow demand recovery in China. Customer caution regarding inventory control has contributed to the ongoing digestion of inventory. However, the company remains hopeful as they observe early signs of demand stabilization in the PC and smartphone market.

These positive developments provide some optimism amidst the challenging market landscape faced by Taiwan Semiconductor.