Influencing Factors for Taiwan
Semiconductor Manufacturing Co. reported a sixth straight quarter of record
sales, buoyed by unrelenting demand by Apple Inc. and other customers for chips
produced by the world’s largest foundry.
the December quarter jumped 21% to NT$438.2 billion ($15.8 billion), according
to monthly figures released by TSMC Monday. That compared with the NT$436.2
billion consensus estimate and the company’s own forecast of sales of as much
as $15.7 billion.
Semiconductor earnings report for 4Q may show revenue above $15.6 billion, a
new record for quarterly sales and at high end of its $15.4-$15.7 billion
guidance. This is supported by a larger sales mix of its most advanced
5-nanometer (nm) node process amid strong demand for smartphone and high
performance computer chips.
also point to full capacity utilization and better gross margin of about 52%,
and could push 4Q operating profit up as much as 14.6% to NT$180 billion.
Previous Taiwan Semiconductor Earnings Report.....
Semiconductor earnings report was last issued on Thursday,
semiconductor company earnings reported showed $1.08 earnings per share (EPS) for the quarter,
beating the consensus estimate of $1.05 by $0.03. The firm had
revenue of $14.88 billion for the quarter, compared to analyst estimates of
$14.89 billion. Taiwan Semiconductor Manufacturing had a return on equity of
29.08% and a net margin of 37.93%.
sell-side analysts forecast that the next Taiwan Semiconductor earnings report will post 4.16 earnings per share for the current year.
TSM has one of the largest moats in the market right now. TSMC is the
largest chip manufacturer in the world. Basically, every electronic thing that
you touch, whether you're talking about changing your thermostat up or down,
you're talking about your iPhone, your laptop that you're using, everything has
been touched by TSM in some form or way because there are so many semiconductor
chips and everything that we're using every single day that's electronic.
Some of their largest customers include NVIDIA (NASDAQ: NVDA), AMD (NASDAQ: AMD), and Apple (NASDAQ: AAPL), and they have over 500 employees and 10,000
different chips that they're making.
They have a lot of variety, and they
also have a ton of pricing power because they are pretty much the only one that
has the infrastructure to build out a lot of these chips.
Factors Affecting The Taiwan Semiconductor Earnings.....
Taiwan is full of a lot of
engineers. TSMC has amazing engineers, and a lot of them have been working for
years on end.
TSM also have 56 percent market
share in global chip manufacturing. They have a ton of pricing power, and nobody's
going away from TSM. They're not leaving because their customers love them.
should not be a concern, particularly for a leading semiconductor foundry like
TSMC. From a geopolitical perspective, the situation appears more contentious,
as Taiwan is stuck in a tug of war between China and the US.
China's increasing military presence and confidence, an invasion is unlikely in
the near future. One reason is the difficulty of such a military advance -
Taiwan's "highly defensible" terrain includes a lack of decent
landing spots for ships given the rocky, mountainous east coast and just 14
potential beach landings. Taiwan's entire national defense strategy is
specifically targeted at defeating such an invasion.
But an even
greater deterrence is the prospect of the United States intervening in response
to a move that would shake up a global supply chain. Both the US and China are
heavily dependent on TSMC for chip manufacturing, and an acute move from either
country is likely to draw serious political consequences.
TSM Major Customers…..
Here are TSMC‘s
top 10 revenue contributors with Apple shown as their number one customer by a
wide margin which will influence the outcome for the Taiwan Semiconductor earnings report.
below reveals that Apple is the main source of revenue for the semiconductor
manufacturing company, accounting for over 25% of the revenue.
plans to increase its manufacturing capacity. Taiwan Semiconductor is planning
to spend $10 billion in the next three years to make this happen. And that’s on
top of the $28 billion the company has spent this year to meet the rising
demand. This included building a plant in Arizona.
Some investors may be concerned that such a dramatic increase in capital
expenditures may impact profitability, particularly as the company has just
closed what is typically its strongest quarter in terms of revenue. But with
the chip shortage likely to last through 2021 at least, it makes sense to
continue to bet on the quality that comes from a leader in the sector.