Taiwan Semiconductor Manufacturing Company Limited Earnings Call $TSM Q1 2022 10Q


APRIL 14, 2022

Key Takeaway from Taiwan Semiconductor Manufacturing Company Limited earnings call $TSM Q1 2022 10Q:

TSMC reported strong first-quarter results with increased revenue, gross margin, and operating margin. The company expects continued growth supported by HPC and automotive-related demand, although it acknowledges challenges from inflation and process complexity. TSMC remains confident in its long-term gross margin targets and is well-positioned to capture the increasing semiconductor demand driven by 5G and HPC applications. The company is actively managing supply chain challenges and maintaining its technology leadership with upcoming nodes like N3


Key points from Taiwan Semiconductor Manufacturing Company Limited earnings call $TSM Q1 2022 10Q

– First quarter revenue increased 12.1% sequentially at NT terms or 11.6% in U.S. dollar terms, supported by strong HPC and automotive-related demand.
– Gross margin increased 2.9 percentage points sequentially to 55.6%, primarily due to cost improvement and value-selling efforts and a favorable foreign exchange rate.
– Operating margin increased 3.9 percentage points sequentially to 45.6% due to lower vaccine donation expenses.
– 5-nanometer process technology contributed 20% of wafer revenue, while 7-nanometer accounted for 30%.
– Revenue contribution by platform: smartphone 40%, HPC 41%, IoT 8%, automotive 5%, DCE 3%.
– Cash and marketable securities at the end of the quarter were TWD 1.3 trillion.
– Second quarter revenue is expected to be between USD 17.6 billion and USD 18.2 billion, representing a 1.9% sequential increase at the midpoint.
– Gross margin for Q2 is expected to be between 56% and 58%, and operating margin between 45% and 47%.
– Full-year growth for 2022 is expected to be at or exceed the high end of the guidance range of mid- to high 20s percent in U.S. dollar terms.
– TSMC expects challenges from rising inflationary costs, increasing process complexity, new investments, and overseas fab expansions but believes a long-term gross margin of 53% and higher is achievable.
– TSMC anticipates a structural increase in long-term semiconductor demand driven by 5G and HPC-related applications.
– TSMC is working closely with tool suppliers to mitigate supply chain challenges and maintain capacity plans.
– Material supply is well-managed with multi-source solutions and a diversified global supplier base.
– N3 technology is on track for volume production in the second half of 2022, with N3E scheduled for 1 year after N3.
– TSMC is confident that its N3 family will be another significant node for the company.


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