Taiwan Semiconductor: King Of Semiconductor Earnings

Jul. 18, 2023 8:30 AM ET Taiwan Semiconductor Manufacturing Company Limited (TSM)

Summary

• TSMC announces earnings Thursday, July 20th.
• If you bought $1,000 of TSMC stock 20 years ago, it would be worth $12,732 today.
• The semiconductor sector will continue outperforming the S&P 500 and NASDAQ-100 in the long-term.

Taiwan Semiconductor Manufacturing (TSM) is the world’s largest contract chipmaker, and it is expected to report strong earnings for the second quarter of 2023. Analysts are expecting the company to report earnings of NT$7.93 per share on revenue of NT$534.6 billion. These numbers would represent year-over-year growth of 33% and 25%, respectively.

TSM’s strong earnings are being driven by the global semiconductor shortage. The shortage has led to increased demand for TSM’s chips, which has allowed the company to raise prices. In addition, TSM has been able to expand its production capacity, which has helped to meet the growing demand for chips.

TSM’s Future Prospects

TSM’s future prospects are bright. The global semiconductor shortage is expected to continue for the foreseeable future, which will provide TSM with a tailwind. In addition, TSM is investing heavily in new technologies, such as 3nm and 2nm chips. These technologies have the potential to be very profitable for TSM, and they could help the company maintain its leadership position in the semiconductor industry.

Risks to TSM’s Business

Despite TSM’s strong future prospects, there are a number of risks to the company’s business. These include:

• Competition. TSM faces increasing competition from other contract chipmakers, such as Samsung and Intel. These companies are investing heavily in new technologies, and they could pose a threat to TSM’s market share.
• Technological challenges. TSM is a technology company, and it faces the risk of being disrupted by new technologies. For example, if another company develops a more efficient manufacturing process, it could hurt TSM’s business.
• Regulatory challenges. TSM faces regulatory challenges in some countries. For example, the company has been criticized for its environmental impact, and it could face regulatory scrutiny in the future.

Conclusion

TSM is a leading semiconductor company with bright future prospects. However, the company faces some challenges, and investors should carefully consider the risks before investing in TSM.

Here are some additional points from the article:

• TSM’s earnings are expected to be driven by strong demand for chips from the automotive, smartphone, and server industries.
• TSM is facing increasing competition from other contract chipmakers, but the company’s strong track record and technological leadership should help it maintain its leadership position.
• TSM is investing heavily in new technologies, such as 3nm and 2nm chips, which have the potential to be very profitable for the company.

Conclusion

TSM is a leading semiconductor company with bright future prospects. The company is facing some challenges, but its strong track record and technological leadership should help it maintain its leadership position.

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