TSMC’s performance in 2023H1 is lower than expected

Taiwan Semiconductor Manufacturing Company (TSMC) will soon announce its financial results for the first quarter of 2023, followed by an investor briefing. Given that the performance likely failed to meet projected targets and the uncertain market conditions in the semiconductor industry for the foreseeable future, the general sentiment towards TSMC’s operational outlook for this year is pessimistic. It is believed that the revenue for the second quarter will continue to decline, necessitating revisions to the roadmap and objectives.

According to Digitimes, semiconductor industry insiders indicate that TSMC’s performance in the first half of this year has fallen short of expectations. If a sufficient rebound in revenue and sustained growth are to be achieved in the latter half of the year, the order volume for Apple‘s new iPhone models will be crucial. The market generally predicts that TSMC’s revenue will decline by 5% to 9% in the second quarter, and if not for the prior price increases, the downturn would be even more pronounced.

Many of TSMC’s clients have opted to reduce orders rather than transfer them. Although there are some urgent orders in the second quarter, demand has not significantly increased. Samsung and Intel are also facing similar challenges, with considerable pressure. Intel, in particular, has yet to see its foundry business take off and may experience losses for three consecutive quarters. TSMC’s annual revenue this year will likely remain on par with last year’s, and even if it declines, the drop will be in single digits, faring much better than the situations at Samsung and Intel.

It is understood that both NVIDIA and AMD are exercising caution, and even if they increase orders in the third quarter of this year, the volume will be relatively limited. MediaTek and Intel have truly complicated matters for TSMC: the former continuously revises orders due to an abundance of inventory and sluggish demand, while the latter persistently downscales its collaboration on the 5/7nm process and procrastinates plans for the 3nm process. These factors have become one of the primary obstacles to TSMC’s revenue growth in 2023.