Earnings Report Preview | TSMC Q3 Profit May Plunge 30%, Market Focuses on Performance Guidance
TSMC is set to announce its third-quarter earnings on Thursday.
According to the Zhongtong Finance APP, TSMC (TSM.US) will announce its third-quarter earnings on October 19th (Thursday). Market expectations for TSMC's Q3 revenue are around $17 billion, a YoY decrease of 20%. Net profit is expected to decline by 30% YoY to NT$195.9 billion (approximately $6 billion), marking the second consecutive quarter of profit decline.
In the second half of last year, global semiconductor demand began to weaken. However, analysts believe that the inventory of smartphone and computer manufacturers is decreasing, and the demand for replenishing inventory is expected to rebound.
Therefore, the focus on Thursday will mainly be on TSMC's outlook for the fourth quarter and beyond.
Analysts at Morgan Stanley predict that TSMC's Q4 revenue will grow by 10% and state that "earnings guidance may unexpectedly improve." One reason for this is the strong demand for high-end chips used in artificial intelligence.
The AI boom has helped boost TSMC's stock price, which has risen by 24% year-to-date.
LSEG SmartEstimate predicts that TSMC's revenue in 2024 will grow by 22%.
However, sources say that TSMC has been feeling nervous about customer demand and has informed its major suppliers to delay the delivery of high-end chip manufacturing equipment. However, they added that the suppliers expect the delay to be short-term.
Some analysts have also tempered their optimism to some extent.
Fubon Securities expects TSMC to have a slow start next year, with a 10% growth in the first quarter. They anticipate order cancellations and moderate demand for replenishing inventory by the end of the year. In particular, major customer Apple (AAPL.US) may reduce orders.
Fubon Securities stated, "We believe that the market consensus is still too optimistic."