TSMC’s Taipei-listed shares slide 6% on global chip outlook concerns

TAIPEI (Reuters) – Taipei-listed shares of TSMC fell more than 6% on Friday following the company’s first-quarter results release, in which it kept its investment and revenue forecasts business for the full year and reported only a gradual recovery in the chip sector.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker and a major supplier to Apple and Nvidia, forecast on Thursday that its second-quarter sales could rise as much as 30%, due to of a wave of demand for semiconductors used in artificial intelligence (AI). ) applications. Its first-quarter profit also beat estimates.

But the company left its capital spending plans for this year unchanged, between $28 billion and $32 billion, and reiterated that it expects revenue for 2024 to rise between 20% and 20%. in US dollars.

He also lowered his outlook for the global non-memory semiconductor industry to a growth rate of around 10%, down from a previous forecast of more than 10%.

Additionally, the company lowered its growth forecast for the global foundry sector to a mid-to-high percentage, down from a previous forecast of around 20%.

Allen Huang, vice president of Mega International Investment in Taipei, said the market is reacting to his revised global outlook for the semiconductor industry and he expects TSMC to increase capital spending this year for premium packaging.

“If capital expenditure was simply maintained at the previous level, it means that the profit is not as expected,” he said.

Another Taiwanese fund manager, who asked to remain anonymous, said that given TSMC’s recent stock rally, investors had high expectations heading into its first-quarter results.

“Its investments have not been as aggressive and the percentage of advanced process technology revenue to overall revenue is still quite low,” the official said.

JP Morgan analysts noted in their list of “key negatives” from the results the slower recovery in logic semiconductor demand for 2024, now 10% growth versus 10%, plus guided growth in January in due to the gradual recovery of smartphones, computers, non-AI servers and decline in automobile demand.

The Taipei market as a whole was down more than 3.5% as of Friday morning.

(Reporting by Ben Blanchard and Yimou Lee; additional reporting by Faith Hung and Jeanny Kao; editing by Christopher Cushing, Muralikumar Anantharaman and Shri Navaratnam)