Taiwan Semiconductor Tops Second-Quarter Targets, Guides Higher

Taiwan Semiconductor Manufacturing (TSM), the world’s largest contract chipmaker, on Thursday beat analyst estimates for the second quarter and gave a better-than-expected forecast for the current period. TSM stock rose in early trading.


The chip foundry earned $1.55 per U.S. share on sales of $18.16 billion in the June quarter. Analysts polled by FactSet expected earnings of $1.44 a share on sales of $17.68 billion. On a year-over-year basis, Taiwan Semiconductor earnings increased 67% while sales advanced 36%.

The company preannounced better-than-expected second-quarter revenue last Friday.

For the third quarter, Taiwan Semi predicted revenue of $19.8 billion to $20.6 billion. The midpoint of $20.2 billion is well above Wall Street’s consensus estimate of $18.66 billion.

TSM Stock Climbs After Report

In premarket trading on the stock market today, TSM stock increased 1.8% to 82.74.

Taiwan Semi makes cutting-edge chips for top fabless semiconductor firms such as Apple (AAPL), AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

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“Our second-quarter business was supported by HPC (high-performance computing), IoT (Internet of Things) and automotive-related demand,” Chief Financial Officer Wendell Huang said in a news release.

He added, “Moving into third quarter 2022, we expect our business to be supported by continued demand for our industry-leading 5-nanometer and 7-nanometer technologies.”

Circuit widths on chips are measured in nanometers, which are one-billionth of a meter.

In the second quarter, shipments of 5-nanometer chips accounted for 21% of total wafer revenue and 7-nanometer chips accounted for 30%. Advanced technologies, defined as 7-nanometer and smaller designs, accounted for 51% of total wafer revenue.

Taiwan Semiconductor Has So-So Composite Rating

According to IBD Stock Checkup, TSM stock ranks No. 12 out of 31 stocks in IBD’s semiconductor manufacturing industry group. TSM stock has an IBD Composite Rating of 63 out of 99.

IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.

IBD’s semiconductor manufacturing group ranks No. 153 out of 197 industry groups that IBD tracks. Semiconductor stocks have fallen on concerns that the chip cycle will soon turn negative.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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