TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co Ltd is expected to report a 23% drop in fourth-quarter profit on Thursday, but analysts expect better growth this year thanks to a rebound in demand.
The likely profit decline also reflects strong performance in 2022, when the company, which counts Apple and Nvidia among its clients, was still growing thanks to pent-up demand after the pandemic.
The world’s largest contract chipmaker is expected to report net profit of NT$226.4 billion ($7.21 billion) for the October-December period – its third straight quarter of falling profits, according to an LSEG SmartEstimate study carried out with 20 analysts. SmartEstimates give greater weight to analyst forecasts that are more consistently accurate.
This compares to the previous year’s net profit of T$295.9 billion.
Revenue for the final three months of last year was NT$625.5 billion ($20.10 billion), according to Reuters calculations based on TSMC data released last week, compared to $19.93 billion in the prior-year period, but that’s still higher than the company’s and the company’s. market expectations.
Global demand for semiconductors began to weaken in the second half of 2022, but analysts say smartphone and computer makers’ inventories are running out and replenishment demand is expected to accelerate.
Given this, the focus on Thursday will be on TSMC’s outlook for this year.
Analysts at Fubon Securities said that after previously expressing concern about TSMC’s outlook for the first quarter, they now believe demand for Apple wafers remains “stable in the near term.”
“Even though there will be a seasonal slowdown in 1Q24, which is widely known to the market, we have not seen further reductions in orders.”
Analysts at KGI Securities said they expected first-quarter sales to outperform typical low-season seasonality and for the full year to see revenue growth of ‘approximately 20% in US dollars due to the recovery in silicon demand and content driven by 5G and high-performance computing applications. .
The AI boom has helped drive up the share price of Asia’s most valuable company, with Taipei-listed TSMC shares jumping 32% in 2023, compared with a 27% gain overall of the market.
TSMC is expected to release its report on Thursday at 06:00 GMT.
($1 = 31.4220 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Christopher Cushing)
