Taiwan Semiconductor sees 19% revenue growth in June 2022

BING-JHEN HONG/iStock Editorial via Getty Images

• Taiwan Semiconductor (NYSE:TSM) reported net revenue of ~NT$175.87B (-5.3% M/M), marking a 18.5% Y/Y growth.
• Revenue for January through June 2022 totaled NT$1,025.22B, marking a 39.6% increase from prior year period.
• Taiwanese Economy Minister this week said order books in the country's industry were very full.
• Market indicates that chip prices will increase ~6% for the majority of its manufacturing processes starting in January; TSMC has not seen any large or significant cutbacks from major clients who order chips, despite worries over a chip glut.

Comments

[Green Mean Machine]

Q2 result is pretty impressive. QoQ growth is 9% compared to 6% same quarter last year.

We need to be careful what we read on the internet including DigiTimes. In the semiconductor world, what we care the most is book to bill ratio and visibility(booking and CRD - Customer Request Date).

When you have book to bill ratio much higher than 1, revenue is primarily determined by product mix, ASP change and CRD. Cancellation is only part of the overall visitbility. You could have revenue decline if customer push out their CRD unless there is NCNR(Non-Cancellable Non-Reschedulable) T&C in place. You could also have cancellation and increase in revenue if customer decide to pull in existing order CRD and cancel non-confirmed order with the upcoming quarter or fiscal year.

Let's say it is true 20,000 wafers are being cancelled by Apple, AMD and Nvidia. How do we know the same companies have not placed the same amount of wafer orders on different node. All in all, we need to understand what is the "Net" visibility in the current fiscal year to determine the demand outlook. Nevertheless, I am sure TSMC can backfill the capacity with the other companies' order.

If they see weakness ahead, why will announce price hike in 2023?

[nickfrancois]

Monthly revenues for June fell 5 percent from May. But they remain 18 percent above June last year.

While January to June revenues are up 40 percent compared with the same period last year.

This is a deceleration from the torrid May numbers, where revenues jumped 65 percent year on year.

But this is not the falling off a cliff scenario derived from market sentiment.

What the numbers from TSMC imply is that the semi sector continue to show some strong level of activity.

I don’t see any signs of contracts cuts from major TSMC clients such as AMD, Nvidia, Apple or Qualcomm.

Market sentiment is overly bearish. And some stocks are bargains now.

[money_walker]

@nickfrancois Jun has 30 days vs May 31 days, so 3.3% less naturally.

[C185]

@nickfrancois
The rumors over the last year are that TSMC increased wafer prices between 10 to 20% depending upon the process. For 7nm and newer the increase is at the low end of that range, with 16nm and older at the 20% figure.

One also needs to know that half of TSMC's revenues come from 16nm and older, and the percentage of wafers from the older nodes is much higher than the revenue percentage would suggest, because the per wafer price for 7nm and 5nm are far higher than for the older nodes.

Taking all this into account the increase in wafer volumes is much closer to nil than the 18.5% YoY revenue growth would suggest.

[Art Rimbaud]

@C185 demonstrably false or you don’t know how to read. they just announced a 6% increase for 2023. In what world do you announce a 6% increase while being able to raise prices “10 to 20%” without having to announce?

TSMC is not eBay; they have contracts with all their customers that stipulate pricing.

[Shamanski]

why does this stock have a pe of 12? and a 2.4% yield?
Why does KO have a pe of 25 with almost no growth?

[Chris Lau]

@Shamanski $KO has a broad, product mix. TSM depends on AMD, NVDA, INTC, which markets believe face a severe slowdown.

[Shamanski]

@Chris Lau
that's the whole point the market is wrong and KO is extremely overvalued with minimal growth, TSM is very undervalued with lots of growth, substantially more than KO, yet half the valuation.

[Peder Steen Jensen]

@Chris Lau How about AAPL, NXPI, QCOM, INTC, GOOGL, etc.?

[Robert Shriver Barnes]

Interesting that the author says there haven't been any orders cancelled. There was a report from digitimes last week saying that Apple, Nvidia and AMD had all requested to cut back orders...

[money_walker]

@sailorbob74133 chips need about 4 months to produce, so Sep is the earlier month to see if any....

[HardCovenant]

decades of commitment to customers the opposite of Intel

[ARNOLDMUSCAT]

Any ideas on why the share price seems to not follow this type of info. Even prior to the current bear market?

[Level 99]

@ARNOLDMUSCAT check in taipei stock exchange data who are the movers, and may get the answer. Foreign hedgers

[SMF_USR]

@ARNOLDMUSCAT Wall
st. Sell side analysts. They are convinced we are in a down cycle with an Impending recession and every company has multiple double orders that are going to suddenly vanish… imminently. Though they been saying that since last year. Because they think that companies like General Motors and Ford and other industrials are all going to cancel their orders, because they learned nothing from 2020 when they did the same thing and then lost sales of big ticket items like cars because they were missing a two dollar chip.

Since these exalted analysts can’t be wrong, every improvement in metrics of TSM or any semiconductor company must mark the peak and things must only go downhill from here. So every time the results come in better than expected at most mean there’s that much more to fall. At least that’s the logic I think. So the better the company does the worse the share price, ‘Cause it just means the peaks gotten higher, since you’re at the top there’s only one way to go, ie down.

[Pepperywater]

@ARNOLDMUSCAT
Because who cares what happened in the past you are buying today what think will happen in future