Shares of chipmaker TSMC jump after quarterly profit beat estimates

The logo of Taiwan Semiconductor Manufacturing Co (TSMC) is pictured at its headquarters in Hsinchu, Taiwan January 19, 2021. REUTERS/Ann Wang/File Photo

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TAIPEI, July 15 (Reuters) – Shares of TSMC (2330.TW) jumped 3.7% on Friday, outperforming the broader market (.TWII), after the Taiwanese chipmaker reported earnings that topped guidance in the second quarter, with analysts bullish on the company’s outlook despite some downside concern.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major supplier to Apple Inc (AAPL.O) and the world’s largest contract chipmaker, reported a 76.4% jump in profit on Thursday for the April-June 2022 period, at 237.0 billion Tanzanian dollars ($7.92). billion). Read more

He said he was “very confident” about its long-term prospects, but also flagged cooling demand from consumer electronics customers who expect to reduce chip inventories over the next few quarters until ‘in 2023.

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The market has been wary of a potential chip glut due to slowing consumer demand and soaring inflation, especially after Micron Technology Inc (MU.O) said last month that a shortage of chips in some sectors was quickly turning into a glut.

TSMC’s earnings should allay some of those worries for now.

JP Morgan analysts said TSMC acknowledged the slowdown was a “positive start”, expecting the chipmaker’s share price to rise slightly in the near term.

“But confirmation of the other semis’ downturn in this earnings season is needed for a definitive clearing event.”

TSMC shares are still down around 20% so far this year, in line with the broader local market, as investors fear Taiwan’s export-dependent economy will be hit by inflation and a slowing global economy. consumer demand in China, the United States and Europe.

Morningstar analysts said they believe Qualcomm Inc’s (QCOM.O) and Nvidia Corp’s (NVDA.O) increased allocation to TSMC would have cushioned the impact of most of the overall demand. down for the next 12 months.

“We note that the duo contracted TSMC as their primary (if not sole) foundry for most 2023 consumer products due to low production yields at Samsung’s Electronics Co Ltd.

Taiwan’s benchmark index closed 0.8% higher on Friday.

($1 = 29.9410 Taiwan dollars)

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Reporting by Yimou Lee and Ben Blanchard; Editing by Jacqueline Wong and Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.

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