Jump to content

TSMC earnings preview: another strong quarter but with cloudy outlook


Recommended Posts

Taiwan Semiconductor Manufacturing Company (TSMC) will report its fourth-quarter earnings on January 12th, 2023.Why TSMC isn’t too optimistic about its outlook in the new year?

bg_trader_chart_downward_curve_gettyimagSource: Bloomberg
 
Hebe Chen | Market Analyst, Melbourne | Publication date: Wednesday 11 January 2023 

TSMC earnings date?

Taiwan Semiconductor Manufacturing Company(TSMC) will report its fourth-quarter earnings on January 12th, 2023. The upcoming report will cover the company’s financial performance from October to December 2022.

TSMC earnings expectation?

  • Earnings

According to TSMC's official guideline released in October, the Taiwan Semiconductor manufacturer's fourth-quarter revenue is anticipated to be around US$ 19.9 billion and US$ 20.7 billion. Given TSMC's proven record of delivering the final result to the upside of expectation, Q4's revenue is likely to show an impressive 29% - 31% improvement from the same quarter last year and 2% - 5% from the previous quarter.

TSMC EPSSource: Nasdaq

The gross margin for the final quarter of the year is forecast to be around 59.5% and 61.5%, a significant improvement from 52% in 2021, especially considering the heightened global-wide inflation pressure in the previous year.

TSMC_3Q.pngSource: TSMC

Apart from the numbers, investors should also keep a sharp eye on the chipmaker's update on its technology development front. In the final days of 2022, TSMC announced that it had started mass production of the 3-nanometer (nm) chips, the most advanced chip in the world so far. TSMC estimates that 3nm technology will open the door to a US$1.5 trillion value market in five years with only a very few competitors.

  • Outlook

However, as the world’s leading semiconductor producer, TSMC isn’t too optimistic about its outlook in the months ahead.

As Wendell Huang, Chief Financial Officer of TSMC, stressed in its Q3 report’s media release: “Moving into fourth quarter 2022, we expect our business to be flattish, as the end market demand weakens, and customers’ ongoing inventory adjustment is balanced by continued ramp-up for our industry-leading 5nm technologies.”

TSMC’s concerns are not groundless. In the early days of 2023, TSMC’s major competitor Samsung Electronics reported that its operating profit fell by 69% in the fourth quarter of 2022. The worst-than-expected drop is not only bad news for South Korea’s largest company but, more importantly, is a surging sign that the global economic slowdown has hindered the electronics demand earlier than anticipated.

Meanwhile, TSMC’s biggest customer, Apple, is widely anticipated to cut its production target in 2023 due to the subdued demand forecast for smartphones. Based on TSMC’s Q3 report, smartphone market contributed to 41% of TSMC’s revenue.

TSMCplateform.pngSource: TMSC

TSMC share price

Despite a V-shape rebound in the fourth quarter of the year to push up the price from its lowest level in two years, TSMC’s shares still lost more than 40% to the end of the year.

From a technical point of view, while the 38% rebound from the October low helped the price return to its 50 and 100-day moving average, it only marked a lower high in the daily chart. As such, it’s difficult to confirm for now that the bear view is ready to be discarded.

At the moment, the price is consolidating within the moving band of $75-$80 range. Only a break-out above the December high at $83 could open the sky to the upside. On the other hand, major support levels around $74 will stop the slide if the earnings result fails to meet the expectation.

TSMCDAILYCHART.pngSource: IG

TSMC summary

In summary, it’s not a realistic expectation to bet on the company to be immune to the industry-wide correction and economic downtrend. As such, the strong growth that TSMC has seen for the past two years could potentially come to a halt in 2023.

However, for TSMC’s long-term believers, it’s not hard to see that the company remains in a good position to not only survive in a hard time but also capture the new growth point with the most advanced and demanded technology in the world.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      23,575
    • Total Posts
      96,894
    • Total Members
      44,148
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Dalts365
    Joined 30/11/23 08:49
  • Posts

    • US dollar on bearish path, USD/JPY tests support, USD/CAD eyes rebound, and AUD/USD faces overbought challenges.   Source: Bloomberg   Forex Shares United States dollar Market trend USD/CAD AUD/USD    Diego Colman | Market Analyst, New York | Publication date: Thursday 30 November 2023 06:54 USD/JPY technical analysis USD/JPY (大口) has been on a major bullish run since the beginning of the year, it has trended lower in recent days following several unsuccessful attempts at clearing overhead resistance in the 152.00 region. After the latest pullback, which has been accelerated by falling US yields, the pair has arrived at the doorsteps of an important floor near 147.25. The integrity of this technical area is vital; failure to maintain it could trigger a drop towards channel support at 146.00. On further weakness, attention shifts to 144.50. In the event of a bullish turnaround, the first obstacle that could hinder upside progress appears at 149.70. Overcoming this resistance level might prove challenging for the bulls, yet doing so could spark a rally towards 150.90, possibly followed by a retest of this year's high. USD/JPY price action chart   Source: TradingView USD/CAD technical analysis USD/CAD has also corrected lower this month, but it has started to perk up after encountering support near 1.3570-1.3555, where the 100-day simple moving average converges with a short-term rising trendline. Maintaining this floor will bring stability to the pair, and may create the right conditions for a rebound toward 1.3630. Further strength could redirect focus towards the 1.3700 handle. On the other hand, if USD/CAD resumes its descent and breaks below cluster support stretching from 1.3570 to 1.3555, we may see a drop towards the 200-day simple moving average, just above the psychological 1.3500 mark. Prices could gain a foothold in this area on a pullback, but in the event of a breakdown, a move towards 1.3400 seems very possible. USD/CAD price action chart   Source: TradingView AUD/USD technical analysis The downturn in the broader US dollar has benefited the Aussie significantly in recent weeks. For instance, AUD/USD has staged a solid rally in November, briefly touching its strongest level since early August during the overnight session. While AUD/USD retains a constructive short-term bias, solidifying confidence in the bullish outlook requires a decisive move above trendline resistance at 0.6675. Given the pair’s overbought conditions in recent days, this scenario may take some time to develop, but an abrupt and unexpected breakout could still propel the exchange rate towards the 0.6800 handle. Conversely, if upward pressure fades and sellers regain decisive control of the market, primary support rests at 0.6620/0.6600 and then 0.6580, near the 200-day simple moving average. On further weakness, we could see a retrenchment towards 0.6525. AUD/USD price action chart   Source: TradingView       This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
    • German disinflation persists; US Q3 GDP revised up, overshadowing CPI, as eyes turn to EU inflation.   Source: Bloomberg   Euro Shares Inflation European Union United States United States dollar  Richard Snow | Analyst, DailyFX, Johannesburg | Publication date: Thursday 30 November 2023 06:10 Inflation in Germany dropped to 3.2% compared to November 2022; and represented a further decline from October’s 3.8% year-on-year print. More notably, the month-on-month decline was 0.4% and sharper than the 0.2% estimate. Economic calendar   Source: DailyFX Anticipation surrounds the EU's impending inflation data – due tomorrow - and its expected to show further declines in both headline and core measures. The ongoing inflation descent has led markets to factor in 2024 rate cuts, mirroring the pace expected from the Fed—amounting to just over 100 bps. Yet, the EU's economic resilience, lagging behind the US, raises concerns of steeper inflation drops. Declining activity may exacerbate economic challenges, posing a potential threat to the Euro." The inflation print was soon upstaged by the upward revision to US GDP growth, relating to the third quarter, resulting in an intra-day move lower on the five-minute time frame. EUR/USD five-min chart   Source: TradingView The daily EUR/USD chart sees the pair pulling back today, after hawkish comments from Fed Board Member Waller, anticipated the first rate cut in the US taking place in three-five months. The dollar sold off notably thereafter. US PCE data tomorrow can further influence the direction of the pair tomorrow, as well as Powell's potential push back to Wallers rate cut comments. EUR/USD daily chart   Source: TradingView       This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
×
×
  • Create New...
us