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TSMC Q2 2023 Earnings Report

A woman walks past the Taiwan Semiconductor Manufacturing Company (TSMC) logo at the Hsinchu Science Park in Hsinchu on July 5, 2023. (Photo by Sam Yeh / AFP) (Photo by SAM YEH/AFP via Getty Images)

Sam E | Afp | Getty Images

A Taiwanese semiconductor companythe world’s largest chip maker, posted a drop in second-quarter profit Demand for consumer electronics continues to fall on Thursday.

Here are TSMC’s Q2 results compared to Refinitiv consensus estimates:

  • income: 480.84 billion New Taiwan Dollars ($15.68 billion) vs Expected New Taiwan Dollars 478.83 billion
  • Net income: NT$181.8 billion vs. NT$172.55 billion expected

TSMC reported that revenue fell 10% year-on-year to NT$480.84 billion, while net income fell 23.3% year-on-year to NT$181.8 billion. The company previously forecast second-quarter revenue of $15.2 billion to $16 billion.

TSMC said the business was impacted by macroeconomic factors “which reduced end-market demand and resulted in ongoing adjustments to customer inventory.”

This is the company’s first quarterly decline in net income since the second quarter of 2019.

Is there a recovery?

TSMC is a leading manufacturer of the world’s most advanced processors, including the chips used in the latest iPhones, iPads and Macs. But demand for consumer electronics has fallen since the pandemic.

Global demand for laptops and smartphones has exploded during the Covid-19 lockdown, prompting smartphone and PC makers to stockpile chips. These companies are now struggling with excess inventory as consumers cut back on purchases of these items due to rising inflation. This caused the price of chips to fall.

In May, TSMC’s biggest customer, Apple, reported that overall sales fell for the second quarter in a row.

The global smartphone market fell 11% year-over-year in the second quarter, according to a report released Tuesday by data analytics provider Canalys.

But Canalys said there are signs of a recovery in the smartphone market.

“The smartphone market is sending the first signs of recovery after six consecutive quarters of decline from 2022,” said Canalys analyst Le Xuan Chiu. “Smartphone inventories have started to clear as smartphone vendors preferred to cut back on older models to make room for new launches.”

This is hot news. Check for updates.

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