TSMC Reports Mixed Q4 Data, Faces Slow Demand

On Thursday, Taiwanese chip maker TSMC unveiled mixed financial results for the fourth quarter of 2023 as it faces slow demands. Its stock price hiked by 6.38% to $87.00 per share on January 12. However, it is anticipated to decrease by -0.29% to $86.75 apiece in the next session.

Furthermore, the firm’s share price went down by 27.10% in 2022 but is up by 8.50% this year, giving it a market value of $412.78 billion.

Its revenue grew by 26.70% to $19.93 billion, surpassing the analysts’ expected data of $20.38 billion. The figures had progressed from the former statistics of $19.22 billion. Likewise, the TSMC earnings per share rose to $1.82, exceeding the $1.78 forecast and improving from the previous $1.70 record.

It booked a record profit of $9.72 billion from October to December, better than the $6.01 billion a year earlier. However, analysts predicted the semiconductor industry would drop sometime in the first half and recover in 2023’s second half. They added that new product launches like artificial intelligence-enabled goods would help the rebound.

Also, the chip giant announced to cut capital expenditure between $32.00 and $36.00 billion from $36.30 billion in 2022.

In addition, Apple, a significant client, trimmed output estimates by TSMC after COVID-related issues in Zhengzhou struck its supply chain.

Taiwan Chip Maker Faces Expensive Bills

Taiwan Semiconductor Manufacturing deals with the challenges of being the world’s dominant chip maker.

The bills are adding up for TSMC as research and development expenses will hike by a fifth this year. As a result, developing next-generation technology would also get pricier.

A slump in the number of customers, cost inflation, and unfavorable exchange rate movements became factors. Also, the new factories in the US were added to the TSMC expenses list.

Analysts have stated that the chip maker’s construction costs are five times bigger in the US than in Taiwan.

Notably, its operating profit margins are estimated to be as low as 41.50%, higher than its rivals.