Taiwan Semiconductor strengthens despite downcast outlook
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Taiwan Semiconductor (NYSE:TSM) strengthened in early trading on Thursday, gaining more than 4%, even as the global foundry offered a downtrodden outlook for the second-quarter.
Looking ahead, Taiwan Semiconductor (TSM), which produces chips for some of the world's largest tech companies including Apple (AAPL), Nvidia (NVDA) and AMD (AMD), said it expects second-quarter sales to be between $15.2B and $16B, well below the $18.16B it generated in the prior year.
On a conference call discussing its first-quarter results, TSM's (TSM) CFO Wendell Huang said there is likely to be a "further inventory adjustment" by its customers. The company, added that inventories were likely to come back to balance to a "more healthy level" in the third-quarter.
Despite the weak forecast, Taiwan Semiconductor (TSM) said it would keep its capital spending plans to be between $32B and $36B, despite some speculation to the contrary.
Taiwan Semiconductor (TSM) reported mixed first-quarter results, as sales fell 4.8% year-over-year to $16.72B on "softening end-market demand," but earnings of $1.31 per share topped estimates by 11 cents.
Gross margin for the quarter was 56.3%, while operating margin and net profit margin came in at 45.5% and 40.7%, respectively.
On Wednesday, it was reported that Taiwan Semiconductor (TSM) is pushing back on some of the more controversial parts of the U.S. CHIPs Act.