TSMC Lowers Q4 Outlook on Slowing Demand

Taiwan Semiconductor Manufacturing Co (TSMC) expects its business to stabilize in the current quarter as global demand slows. CFO Wendell Huang noted that TSMC expects business would be broadly flat in the current quarter.

He said that weakening demand and inventory adjustments by customers are being offset by an acceleration in its 5nm products. Shipments of 5nm chips accounted for 28% of total wafer revenue during Q3, with 7nm generating 26%. Net profit grew 79.7% to TWD280.9 billion ($8.8 billion) and revenue increased 47.9% to TWD613.1 trillion.

TSMC forecast revenue of between $19.9 billion and $20.7 billion for the current quarter, with gross profit margin in the range of 59.5% and 61.5% compared with 60.4% in Q3. Three months ago, Bloomberg reported the company raised its full-year revenue forecast from 30% to the mid-30% range. With demand for chips falling, analysts expect TSMC to cut back on its aggressive 2022 CAPEX target: it originally earmarked $40 billion to $44 billion compared with $30.4 billion in 2021.