TSMC beats revenue and profit expectations for third quarter

Taiwan Semiconductor Manufacturing Company reported a third-quarter profit of 211 billion New Taiwan dollars ($6.69 billion) on Thursday as weak demand for consumer electronics persists. While that was the second straight quarter of profit declines, the world’s largest contract chipmaker bested analyst expectations.

Here are TSMC’s third quarter results versus Refinitiv consensus estimates:

• Revenue: 546.73 billion New Taiwan dollars ($17.28 billion), vs. NT$540.39 billion expected
• Net income: NT$211 billion, vs. NT$191.43 billion expected

TSMC reported revenue slipped 10.83% from a year ago to NT$546.73 billion, while net income fell 24.87% from a year ago to NT$211 billion. That compares with TSMC’s guidance for third-quarter revenue between $16.7 billion and $17.5 billion.

“Our business was supported by the strong ramp of our industry-leading 3-nanometer technology and higher demand for 5-nanometer technologies, partially offset by customers’ ongoing inventory adjustment,” said TSMC in its earnings report.

The chip giant said that revenue increased 13.7% in the third quarter as compared to the second quarter.

In the second quarter, the Taiwanese firm reported a decline in quarterly profit for the first time in four years due to a post-pandemic plunge in the demand for consumer electronics like smartphones and laptops. But analysts have said inventories at smartphone and computer makers are running down and restocking demand is expected to pick up.

During the earnings call on Thursday afternoon, CEO C.C. Wei said that the firm expects inventories to continue to decline.

“Due to the persistent weaker overall macroeconomic conditions and slow demand recovery in China, customers remain cautious in their inventory control. That’s why we expect the inventory digestion to continue in the fourth quarter,” said Wei.

TSMC is the top producer of the world’s most advanced…