© Reuters. Apple Chip Supplier TSMC Posts Q1 Earnings: What Investors Need To Know
Benzinga – Apple, Inc. (NASDAQ:AAPL) chip supplier Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) on Thursday reported a modest year-over-year growth in revenue amid falling contributions from most of its end markets. The company said it sees a decline in second-quarter revenue and a contraction in gross margin.
What Happened: TSMC reported earnings per share of NT$7.98, or $1.31 per ADR for the first quarter that ended March 31, 2023, up 2.1% from a year earlier.
On a quarter-over-quarter basis, EPS fell 30%.
Net sales climbed 3.6% year-over-year but were down 18.7% quarter-over-quarter to NT $508.63 billion or $16.72 billion. The company earlier guided to revenue of $16.7 billion to $17.5 billion.
Analysts, on average, expected EPS of $1.20 and revenue of $16.81 billion.
High-performance computing and smartphones contributed 44% and 34% to total revenue, respectively, while the automotive segment brought in 7%. Sales to smartphone customers fell 27%, while the automotive end-market was the only one to show growth.
The company noted that the gross margin expanded from 55.63% in the year-ago quarter to 56.3%. The metric, however, slipped from the fourth quarter’s 62.22%.
First-quarter operating and net profit margins came in at 45.4% and 40.7%, respectively.
TSMC noted that 5-nm technology accounted for 31% of the total wafer revenue and 7-nm about 20%, making advanced technologies’ contribution at 51% of the total wafer revenue.
TSMC’s earnings assume importance for most of the tech giants, including Apple and Nvidia Corp. (NASDAQ:NVDA), which source from the Taiwanese company the chips that power their products.
Forward Outlook: TSMC guided second-quarter revenue to $15.2 billion to $16 billion, assuming an exchange rate of NT $30.4 to one U.S. dollar. The guidance surrounded the consensus estimate of $15.98 billion.
The company expects the gross margin to contract by 52%-54%.
Price Action: The U.S.-listed ADR of TSMC ended Wednesday’s session down 1.03% to $87.23, according to Benzinga Pro data.
Read Next: Is TSMC Stock A Buy Or Sell?
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