By Sarah Wu and Yimou Lee
TAIPEI (Reuters) -Taiwanese chipmaker TSMC posted a smaller-than-expected 25% fall in third-quarter net profit on Thursday and said it sees signs of stability, raising hopes that a slowdown in the semiconductor industry is poised for recovery.
The world’s largest contract chipmaker was upbeat about the year ahead, predicting healthy growth and a drop in industry inventory levels.
Demand for personal computers and smartphones, two of the tech giant’s business drivers, are expected to lead its recovery, along with artificial intelligence growth continuing to fuel demand for TSMC’s advanced chips and advanced packaging.
“We can expect 2024 to be a healthy growth year for TSMC,” CEO C.C. Wei told an earnings briefing, with the company expecting to “do better than the overall industry” next year.
“In these couple of months we have started to see demand stabilise in the PC and smartphone end market” and inventory controls have become “more healthy than we thought”.
“Right now, do we see the bottom? Very close,” Wei said, adding, “It is too early to call it a sharp rebound.”
Investors have been closely watching for any signs to better gauge the strength of any recovery, as TSMC’s key supplier ASML warned of flat 2024 sales on Wednesday, citing caution by chipmakers in new investment.
As market uncertainty lingers in the short term, TSMC has “appropriately tightened” its capital spending for this year to about $32 billion, Wei said. Capital spending for the three months to September slid 13% from the previous quarter to $7.1 billion.
The forecast-beating third-quarter results from the tech bellwether follows better-than-expected quarterly profit from rival Samsung Electronics earlier this month.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple and Nvidia supplier, said July-September net profit fell to T$211 billion from T$280.9 billion a year earlier.
The profit beat a T$195.5 billion LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.
TSMC, Asia’s most valuable listed company, said third-quarter revenue dropped 14.6% to $17.3 billion, in line with the company’s previous forecast of $16.7 billion to $17.5 billion.
Revenue from the high performance computing segment, which includes high-end AI chips, accounted for 42% of its total sales, down from 44% in the previous quarter but up from 39% a year earlier.
As the biggest maker of advanced chips, TSMC must navigate an uncertain industry outlook and a U.S.-China chip spat that could make it vulnerable.
TSMC’s Taipei-listed shares fell 27.1% in 2022 but are up 22% so far this year, giving the chipmaker a market value of $432.3 billion. The stock rose 1.1% on Thursday versus a flat benchmark index.
(Reporting by Sarah Wu and Yimou Lee; Editing by Jacqueline Wong and William Mallard)
Source: finance.yahoo.com