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Taiwan Semiconductor Earnings Match Estimates, Outlook Tops Views

Taiwan Semiconductor Manufacturing (TSM), the world’s leading chip foundry, on Thursday met earnings expectations for the second quarter. It also guided higher for sales in the third quarter. But TSM stock dropped in early trading.




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Taiwan Semi earned 93 cents per U.S. share in the June quarter, up 18% year over year and in line with analyst estimates. The company’s sales rose 28% to $13.29 billion in the second quarter.

In local currency, Taiwan Semi’s sales increased 19.8% year over year while earnings rose 11.2%.

For the third quarter, Taiwan Semi forecast revenue of $14.6 billion to $14.9 billion. The midpoint of $14.75 billion topped Wall Street’s consensus estimate of $14.57 billion. Its sales in the year-earlier period were $12.4 billion.

TSM Stock Falls After Q2 Earnings Report

In premarket trading on the stock market today, TSM stock fell 2.9%, near 120.80.

“Our second-quarter business was mainly driven by continued strength in HPC (high-performance computing) and automotive-related demand,” Chief Financial Officer Wendell Huang said in a news release.

He added, “Moving into third quarter 2021, we expect our business to be supported by strong demand for our industry-leading 5-nanometer and 7-nanometer technologies, driven by all four growth platforms, which are smartphone, HPC, IoT (Internet of Things) and automotive-related applications.”

Circuit widths on chips are measured in nanometers, which are one-billionth of a meter.

In the second quarter, shipments of 5-nanometer chips accounted for 18% of the company’s total wafer revenue. And 7-nanometer chips accounted for 31% of wafer revenue.

Taiwan Semi Stock Consolidating

Taiwan Semi sales in June got a boost from the start of iPhone 13 chip production. Analysts expect Apple (AAPL) to introduce its next smartphones in September.

Taiwan Semi makes chips for a host of fabless semiconductor companies including AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

TSM stock has been consolidating for the past 22 weeks with a buy point of 142.30, according to IBD MarketSmith charts. The buy point is 10 cents above the stock’s all-time high of 142.20, reached on Feb. 16.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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