$TSMC (TSM) $Q1 results were announced a few days ago.
Revenue
In Q1, the company achieved revenue of US $16.72 billion in a single quarter, which was-16. 1% month-on-month and-4. 8% year-on-year, which was located at the lower limit of previous performance guidelines, corresponding to NT $508.63 billion, which was-18. 7% month-on-month and +3.6% year-on-year. It was under pressure from macroeconomic downturn, weak downstream demand and customer inventory adjustment.
The company believes that the industry will pass through the bottom in the second quarter, and 2H23 will recover its quarterly growth
Gross profit
The level of 56.3% was-0. 7 ppt month-on-month and +5.9 ppt year-on-year, which was achieved due to the Company's active cost control, and the month-on-month decline due to the reduction of capacity utilization rate and the suppression of unfavorable exchange rate factors. However, the actual data exceeded the upper limit of the expected range given three months ago by 0.8%. In addition, the overall economic situation is declining, the demand in the terminal market is weak, and the demand in China is lower than expected after unsealing, so the inventory adjustment will continue into the third quarter. After the electricity price increased by 15% in the second half of 22 years, the electricity price of the company increased by 17% from April 1 this year, which is expected to reduce the gross profit margin of the company by 0.6% in the second quarter. The company expects that the impact of high electricity price will continue in the second half of the year, reducing the company's annual gross profit margin by 0.5%.
Looking at 2023, the company's gross profit margin is affected by low capacity utilization rate, overseas Fab expansion, N3 increase and inflation. The company will implement internal cost control and continue to sell products. The company believes that the long-term gross profit margin can reach more than 53%.
Net income
Q1 reached NT $206.99 billion,-30.0% month-on-month and +2.0% year-on-year, exceeding expectations. The company believes that the revenue in the second quarter will continue to fall but is expected to bottom out, and the mass production of 3 nm in the second half of the year will drive the revenue.
Key points of investment
According to the report released by TSMC, although the revenue of 5 nm and 7 nm wafers still accounts for more than half of the market share, they declined slightly in the fourth quarter of 2022 (5 nm decreased from 32% to 31%, and 7 nm decreased from 22% to 20%), reflecting the trend that the decline rate of the company's advanced manufacturing process is higher than the overall decline rate. In addition to the positive growth of automotive electronics business, the revenues of platforms such as smart phones, high-performance computing and Internet of Things all declined, among which the high-performance computing business experienced negative growth for the first time quarter-on-quarter, which was consistent with the overall decline in server shipments observed by upstream and downstream industrial chains in the fourth quarter of 2022, while the shipments of consumer electronic products such as smart phones remained sluggish. North American customers accounted for a slight decline in the company's overall revenue, from 69% in the fourth quarter of 2022 to 63%, which was consistent with the decline in advanced process, smartphone and high-performance computing revenue.
The company predicts that the global semiconductor market will have a low single-digit decline and the wafer foundry market will have a high single-digit decline in 2023, but TSMC itself is still expected to achieve a revenue growth of about 20%, of which mass production of 3 nm will be an important incremental source. At present, TSMC's N3E process platform has passed the test, preparing for mass production in the second half of 2023. The management predicts that thanks to the support of high-performance computing and smart phone chip customers, the company's 3 nm production line is expected to achieve full production in 2023, and make a single-digit contribution to the company's revenue.
The company maintained its annual capital expenditure forecast of $32 billion to $36 billion. Arizona's N4 production line is expected to be put into use in the second half of 2024; Japan's characteristic process fab is expected to be put into use at the same time; European factories will focus on automotive technology according to customer needs and government support; The expansion of Nanjing 28 nm factory will support Chinese mainland customers; The expansion of Kaohsiung factory will continue, but at present, the company has adjusted its energy from 28 nm to focus on advanced manufacturing processes. TSMC is closely involved in the Nvidia CuLitho project and believes that it can enhance the competitiveness of the company's 2 nanotechnology. At present, the research and development of the company's 2nm process technology is progressing smoothly, and mass production is expected to be realized in 2025.
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