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TSMC Releases 2022 Q4 Earnings, Profit Climbs 78%

Taiwan Semiconductor Manufacturing Company (TSMC) has posted another quarterly record and a 78% surge in net profit during 2022 Q4. The company saw exponential growth in its net profit due to the solid sales of advanced chips. The sales helped TSMC in 2022 Q4, evading the industry-wide downtown that affected other manufacturers.

During the December quarter, the semiconductor company and Apple’s major supplier noted that its net profit moved from T$166.2 billion in the previous year to T$295.9 billion. Meanwhile, the average estimate by analysts was T$289.44 billion. Analysts explained that the company’s dominance as one of the world’s top advanced chip manufacturers had helped its earnings. In addition to the increase in net profit, TSMC reported that its revenue in 2022 Q4 rose 26.7% YoY to $19.93 billion but fell 1.5% from Q3. The company projected that its YoY revenue would come between $19.9 billion and $20.7 billion. After losing 27.1% in its share price in 2022, TSMC has gained 8.5% since the year started, resulting in a $412.78 billion market valuation.

Generally, rising interest rates by the Feds to combat inflation has affected different sectors, including chip manufacturers. The chip industry has struggled with lower demand for gadgets amid the economic downturn. TSMC cut its annual budget by at least 10% for 2022 back in October. The company also pushed out a cautious note on upcoming demand. It referred to challenges associated with rising inflationary costs and predicted a hit on the chip market in 2023.

During Q4 2022, TSMC reported 52% in its operating margin, gross margin was 62.2%, and net profit margin was 47.3%. Shipments of 5-nanometer accounted for 32% of total wafer revenue during the period. At the same time, 7-nanometer of the total wafer was 22%. Advanced technologies was 54% of total wafer revenue. TSMC vice president and chief financial officer Wendell Huang spoke about the 2022 Q4 performance:

“Our fourth quarter business was dampened by end market demand softness, and customers’ inventory adjustment, despite the continued ramp-up for our industry-leading 5nm technologies. Moving into first quarter 2023, as overall macroeconomic conditions remain weak, we expect our business to be further impacted by continued end market demand softness, and customer’s further inventory adjustment.”

On 2023 Q1 guidance, TSMC expects revenue to come between $16.7 billion and $17.5 billion. The company is also predicted to realize between 53.5% and 55.5% in gross profit margin and between 41.5% and 43.5% in operating profit margin. The capital budget expected for the new year is between $32 billion and $36 billion.next

TSMC Releases 2022 Q4 Earnings, Profit Climbs 78%

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