TSMC’s This autumn revenue to slip 23%, give attention to rebounding demand this yr

Taiwan Semiconductor Manufacturing Co Ltd is predicted to report a 23% drop in fourth-quarter revenue on Thursday, however analysts predict higher progress this yr on the again of rebounding demand.The possible decline in revenue additionally displays a powerful efficiency in 2022, when the corporate, whose prospects embrace Apple and Nvidia, was nonetheless driving excessive on pent-up post-pandemic demand.

The world’s largest contract chipmaker is about to report web revenue of T$226.4 billion ($7.21 billion) for the October to December interval – its third straight quarter of revenue decline, in line with an LSEG SmartEstimate drawn from 20 analysts. SmartEstimates give larger weighting to forecasts from analysts who’re extra constantly correct.

That compares to the year-earlier web revenue of T$295.9 billion.Income within the last three months of final yr got here in at T$625.5 billion ($20.10 billion), in line with Reuters calculations from TSMC knowledge launched final week, in contrast with $19.93 billion within the year-earlier interval, however that also beat each the corporate’s and market’s expectations.

World demand for semiconductors started to weaken within the second half of 2022, however analysts say inventories at smartphone and laptop makers are working down and restocking demand is predicted to choose up.

On condition that, a lot of Thursday’s focus shall be on TSMC’s outlook for this yr. Fubon Securities analysts stated that having beforehand expressed concern for TSMC’s first quarter outlook, they now believed Apple wafer demand stays “regular within the quick time period”.

“Though there shall be seasonal slowdown in 1Q24, which is extensively identified by the market, we’ve not seen extra order cuts.”

KGI Securities analysts stated they anticipated first quarter gross sales to outperform typical sluggish season seasonality and that for the total yr it noticed mid-20% top-line progress in U.S. greenback phrases as a consequence of demand restoration and silicon content material pushed by 5G and excessive efficiency computing functions.

The AI increase has helped drive up the value of shares in Asia’s most beneficial firm, with TSMC’s Taipei-listed inventory having surged 32% in 2023, in contrast with a 27% achieve for the broader market.

TSMC is because of report at 0600 GMT on Thursday.

($1 = 31.4220 Taiwan {dollars})