TSMC has posted another double-digit year-on-year revenue drop, yet is again banking on a pick up in the near future in what is virtually a re-run of the chipmaker's financial results for the previous quarter.
The Taiwanese biz reported revenue in US dollars for calendar Q3 of $17.28 billion, a decrease of 14.6 percent compared with the same period last year, but up 10.2 percent quarter-on-quarter.
To put this in perspective, TSMC was riding high this time last year with revenue up a whopping 47.9 percent, and the entire semiconductor market has since been hit by a downturn in demand caused by surging inflation and customers choosing to use up excess inventory before committing to further orders.
It does mean that the world's largest semiconductor contract manufacturer is once again forecasting that market conditions will be kinder in the next quarter, which is what the company's VP and CFO Wendell Huang said in the last earnings call.
And once again, TSMC seems to have beaten some analysts' forecasts with this latest set of results, with revenue towards the upper end of its own estimates.
Washington's export restrictions do not seem to be hurting makers of chip manufacturing kit just yet, judging by the latest results from ASML and Lam Research.
ASML revealed that its sales to China in July-September nearly doubled over the previous quarter, as Chinese chipmakers raced to buy equipment before any updated export controls came into effect.
CEO Peter Wennink is said around 10 to 15 percent of current shipments to China would fall under the new restrictions, but the company expects the new rules to have no meaningful impact on its financial outlook for 2023, and that in future there will be significant demand from China for mid-critical and mature technology.
Lam CEO Tim Archer also downplayed the effect of the new rules, saying: "We've reviewed the regulations and our early assessment is we don't see any materially impactful forecasts in business." However, he conceded this was because the company was already quite restricted in terms of what it is able to ship to China.
TSMC offered some indications the semiconductor industry's rough year may be coming to an end, with chief exec CC Wei saying he believed the industry was close to the bottom, and there are "early signs of improvement" in demand from sectors including smartphones and PCs.
In terms of silicon output during Q3, advanced technologies - meaning those producing using a 7nm production node or smaller - accounted for 59 percent of TSMC's total wafer revenue.
Breaking that down, TSMC said its 3nm process tech made up 6 percent of wafer revenue, while 5nm accounted for 37 percent during the quarter, and 7nm was at 16 percent.
"Our third quarter business was supported by the strong ramp of our industry-leading 3-nanometer technology and higher demand for 5-nanometer technologies, partially offset by customers' ongoing inventory adjustment," said Huang.
In terms of market segments for Q3, wafers for HPC and smartphones represented 42 percent and 39 percent of TSMC's net revenue. IoT and Automotive made up another 9 percent and 5 percent.
Looking ahead to the current and final quarter of the calendar year, Huang indicated that TSMC expects to see 3nm output continue to grow, partially offset by inventory adjustment by customers.
Based on the current business outlook, TSMC estimates that revenue for Q4 will be up again to between $18.8 billion and $19.6 billion, taking it almost back to last year's high.
Just this week, TSMC announced it was dropping plans to build a fabrication plant to produce 2nm chips in northern Taiwan after local residents opposed expansion at the site. A few months back, TSMC said the plant in Arizona will be delayed until at least 2025 due a lack of skilled labor, although reports claimed there are other issues. ®
Source: The register