Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip maker, announced a 23% decline in net profit for the second quarter of the year. The company’s net profit dropped to 181.80 billion new Taiwan dollars (US$5.84 billion) from NT$237.03 billion in the same period last year. Despite the decrease, this result surpassed the estimate of NT$173.23 billion by analysts from S&P Global Market Intelligence. Furthermore, TSMC’s net profit also decreased by 12% compared to the previous quarter.
In addition to the decline in net profit, TSMC experienced a 10% decrease in second-quarter revenue, reaching NT$480.84 billion. This figure represents a 5.5% decline compared to the previous quarter.
One of the factors contributing to TSMC’s financial performance was a decrease in its operating profit margin. The company’s operating profit margin deteriorated to 42.0%, which is 7.1 percentage points lower than the same period last year and 3.5 percentage points lower than the previous quarter.
TSMC has been grappling with reduced sales in recent months as its clients clear their inventory. While the pandemic initially led to increased demand for devices such as smartphones and data centers, TSMC is currently facing challenges due to the changing market conditions.
Specifically, revenue from smartphones experienced a decline of 9% compared to the previous quarter, while high-performance computing revenue decreased by 5%. On the other hand, revenue from the automotive sector saw a positive growth of 3% from the previous quarter.
TSMC reported that customers in North America accounted for approximately 66% of its overall revenue, representing an increase from the previous quarter’s 63%. Meanwhile, revenue from China accounted for 12%, down from 15% in the previous quarter.
Overall, TSMC’s second-quarter results highlight the company’s challenges in the current market environment. However, TSMC remains optimistic about its future prospects and continues to navigate through these difficulties while maintaining its position as the leading player in the semiconductor industry.
