Q3 earnings exceeded all forecasts and hit a new quarterly high.

TSMC (2330), a leading foundry, announced its Q3 financial results on October 13, 2012. TSMC's gross profit margin reached 60.4%, net income attributable to parent company was NT$280.87 billion, a new record high, and net income per share was NT$10.83 per share. Benefiting from the strong demand for TSMC's industry-leading 5nm process, TSMC's Q3 gross profit margin reached 60.4% and net income attributable to parent company was NT$280.87 billion, a new record high, with net income of NT$10.83 per share. Compared to Q2, Q3 2022 revenue increased by 14.8% and after-tax net income increased by 18.5%.

TSMC's 5nm process shipments accounted for 28% of wafer sales in Q3, while 7nm process shipments accounted for 26% of wafer sales in Q3. Overall, revenue from advanced processes (including 7nm and beyond) accounted for 54% of wafer sales in Q3; in terms of products, TSMC's Q3 smartphone revenue accounted for 41%, returning to the No. 1 position. In terms of products, TSMC's Q3 smartphone revenue accounted for 41%, returning to the No. 1 spot, while high-performance computing accounted for 39%, Internet of Things (IoT) accounted for 10%, automotive electronics accounted for 5%, and consumer electronics accounted for 2%. The quarterly growth in IoT revenue amounted to 33%, followed by 25% in smartphones, which were the two most important drivers of the single-quarter revenue.

Fourth Quarter Outlook

TSMC said quarterly revenue will be approximately $19.9 billion to $20.7 billion, which will be an increase of approximately 0.4% QoQ at midpoint, in line with market expectations. Moving into the fourth quarter of 2022, TSMC's CFO and Spokesperson, Mr. Jen-Chiu Huang, said that TSMC's results are expected to be flat as demand for TSMC's industry-leading 5nm process continues to increase, which in turn balances out the impact of weaker end-market demand and customers' ongoing inventory adjustments.

2023Year and Future Outlook

TSMC's President, Mr. Chieh-Chia Wei, said that TSMC's target process product mix will continue to increase in 2023, and capacity utilization will continue to be maintained under value enhancement in 2023. For TSMC, looking ahead to 2023, it is expected to grow by 15% to 20%, but it will still be a challenging year due to the impacts of factors such as weak demand, de-stocking, deflation, U.S. Chip Bill, and depreciation, among others. However, it will still be a challenging year. Nevertheless, Mr. Weijia admitted that the short-term weakness in N7 capacity utilization due to changes in market demand is mainly due to the fact that most of the demand from cell phone and PC customers are utilizing the N6/N7 related adjustments to synchronize with the inventory adjustments.