TSMC January 2023 Revenue Report

[Daniel Nenni]

HSINCHU, Taiwan, R.O.C. – Feb. 10, 2023 - TSMC (TWSE: 2330, NYSE: TSM) today
announced its net revenue for January 2023: On a consolidated basis, revenue for January 2023
was approximately NT$200.05 billion, an increase of 3.9 percent from December 2022 and an
increase of 16.2 percent from January 2022.

TSMC Spokesperson:
Wendell Huang
Vice President and CFO
Tel: 886-3-505-5901

Media Contacts:
Nina Kao
Head of Public Relations
Tel: 886-3-563-6688 ext.7125036
Mobile: 886-988-239-163
E-Mail: nina_kao@tsmc.com

Ulric Kelly
Public Relations
Tel: 886-3-563-6688 ext. 7126541
Mobile: 886-978-111-503
E-Mail: ukelly@tsmc.com

 

[Daniel Nenni]

A 16% increase over a record year (2022) is amazing!

 

[Mooredaddy]

And the stock falls. So very strange

 

[lefty]

So, it looks like Digitimes rumours about capacity utilisation falling were wrong.

 

[nghanayem]

For now... We are undeniably in a downturn and TSMCs customers are seeing cooling demand/a weaker 2023. Wafers being payed for during Q4 were finished a month before and fabbed like two to three months before that for wafer agreements that were signed years in advance. It is not unreasonable to see over the next quarter or two a slight drop in revenues/utilization as people shift around delivery dates/allocation; hence the stock decline. “Why hold it now when you can just buy it back in a quarter on the upswing.” is probably what selling investors are thinking.

 

[Mooredaddy]

So, it looks like Digitimes rumours about capacity utilisation falling were wrong.

Digitimes articles are always like 0-10% accurate. There is some tiny bit of truth in there but the headlines are always calamitous. TSMC putting up a 16% growth month in a horrific semi environment is extremely impressive. It remains comically undervalued in my opinion.

 

[Mooredaddy]

For now... We are undeniably in a downturn and TSMCs customers are seeing cooling demand/a weaker 2023. Wafers being payed for during Q4 were finished a month before and fabbed like two to three months before that for wafer agreements that were signed years in advance. It is not unreasonable to see over the next quarter or two a slight drop in revenues/utilization as people shift around delivery dates/allocation; hence the stock decline. “Why hold it now when you can just buy it back in a quarter on the upswing.” is probably what selling investors are thinking.

I mean sure. But the fact remains TSMC is still vastly outperforming both its rivals and customers. We just saw Intels report. WOOF. We saw Samsungs double WOOF. And UMC just reported a monthly decline. Also apple, amd, nvidia etc are all reporting worse financials than TSMC. Intel is now trading at a P/E either above or exactly equal to TSMC. It’s completely wild. This is not trading advice but I reckon when 13F’s come out next week we are going to see a larger Berkshire stake. The stock will go higher then because the market seems unable to think for itself. LOL.

 

[nghanayem]

I mean sure. But the fact remains TSMC is still vastly outperforming both its rivals and customers. We just saw Intels report. WOOF. We saw Samsungs double WOOF. And UMC just reported a monthly decline. Also apple, amd, nvidia etc are all reporting worse financials than TSMC. Intel is now trading at a P/E either above or exactly equal to TSMC. It’s completely wild. This is not trading advice but I reckon when 13F’s come out next week we are going to see a larger Berkshire stake. The stock will go higher then because the market seems unable to think for itself. LOL.

I never said TSMC was in trouble or that things would look bad. More so that it would take more time before the slowdown makes it's way to TSMC given the long lead times for wafers. And like I said I think investors selling is just them wanting to wait out the slow period and buy on the inevitable upswing (and I do mean inevitable because TSMC's current position in the semiconductor industry all but guarantees they will pull through this just fine).

 

[Mooredaddy]

I never said TSMC was in trouble or that things would look bad. More so that it would take more time before the slowdown makes it's way to TSMC given the long lead times for wafers. And like I said I think investors selling is just them wanting to wait out the slow period and buy on the inevitable upswing (and I do mean inevitable because TSMC's current position in the semiconductor industry all but guarantees they will pull through this just fine).

Oh I agree. I just think it’s so dumb how wallstreet continues to try and time market bottoms.

 

[Nokokara]

A 16% increase over a record year (2022) is amazing!

This growth is still good (much better…) vs the global semiconductor business that are now already collapsing in many markets, but

(i) While TSMC January 2023 +16.2% YoY revenue growth is (still…) good/best in this market, it is much smaller that their January 2022 already at +35.8% YoY and even their January 2021 at +22.2% YoY and January 2020 at +32.8% YoY…

(ii) It is strongly driven by their leadership especially on new/most advanced and very expensive technologies which allow them to cover more than half the foundry business revenues…

And after confirming at the end of last year to have now entered volume production with good yields in their new 3nm, in addition of Apple, Qualcomm, MediaTek, Nvidia and AMD using a lot of TSMC state-of-the-art technologies, Broadcom apparently places order last month with this 3nm technology...

 

[Nokokara]

So, it looks like Digitimes rumours about capacity utilisation falling were wrong.

Global wafers volumes requirement is decreasing due to many (but not all…) markets and TSMC January growth is a pure revenue aspect

(i) without yet any visibility before the end of the quarter on the wafers volumes…

(ii) which already start decreasing in Q4 2022 for TSMC (the smallest sold volumes in the last 5 quarters, -6.84% wafers vs Q3 2022 and -0.62% vs Q42021 while their capacity increased +15.4% in 2022 vs 2021…) but without impact on their revenues as it is was with both prices raised and bigger ratio of 5nm more expensive…

 

[Daniel Nenni]

Global wafers volumes requirement is decreasing due to many (but not all…) markets and TSMC January growth is a pure revenue aspect
(i) without yet any visibility before the end of the quarter on the wafers volumes…
(ii) which already start decreasing in Q4 2022 for TSMC (the smallest sold volumes in the last 5 quarters, -6.84% wafers vs Q3 2022 and -0.62% vs Q42021 while their capacity increased +15.4% in 2022 vs 2021…) but without impact on their revenues as it is was with both prices raised and bigger ratio of 5nm more expensive…

It does not make sense to compare these numbers with the last five quarters. The last five quarters involved catching up from order cancellations in 2019 and building inventory levels to historical highs. The overall semiconductor market is predicted to contract significantly in 2022 (-22% to -6%) yet TSMC is back to posting pre pandemic double digit revenue numbers. It truly is amazing.

 

[Nokokara]

It does not make sense to compare these numbers with the last five quarters. The last five quarters involved catching up from order cancellations in 2019 and building inventory levels to historical highs. The overall semiconductor market is predicted to contract significantly in 2022 (-22% to -6%) yet TSMC is back to posting pre pandemic double digit revenue numbers. It truly is amazing.

Yes, you are right…

The fact that TSMC is what you mention as “amazing” is exactly what I also confirmed with the details of their best/most efficient leadership in the semiconductor market both in term of most advanced technologies and best revenues growth (becoming now top 1 in term of yearly amounts…) vs all the rest of the global semiconductor market but not linked to their capacity utilisation also recently a bit decreasing like in the global semiconductor market…

And anyway TSMC volumes decrease was also recently existing but a bit less than many other ones in certain products/technologies and without yet any current precise visibility for their capacity and production volumes evolution in January and further this year 2023…

 

[Mooredaddy]

It does not make sense to compare these numbers with the last five quarters. The last five quarters involved catching up from order cancellations in 2019 and building inventory levels to historical highs. The overall semiconductor market is predicted to contract significantly in 2022 (-22% to -6%) yet TSMC is back to posting pre pandemic double digit revenue numbers. It truly is amazing.

I think we can expect a decent second half out of TSMC as well. Intel indicated that orders are well below sell through levels so the inventory is correcting very fast and violently. Customers are going to be out of inventory to sell rather quickly if they continue the burn much longer in the 2nd half. Even Intel will have a better second half I expect. And if Intel is doing better you can bet your ass TSMC will be doing just as well if not significantly better.

 

[Nokokara]

I think we can expect a decent second half out of TSMC as well. Intel indicated that orders are well below sell through levels so the inventory is correcting very fast and violently. Customers are going to be out of inventory to sell rather quickly if they continue the burn much longer in the 2nd half. Even Intel will have a better second half I expect. And if Intel is doing better you can bet your ass TSMC will be doing just as well if not significantly better.

There are currently not any real/credible « expectations » but now just only hopes and dreams…

Because, with the current huge (and strange…) worldwide transitions/changes including geopolitical, social, societal, economical, inflation risks/crisis, the volatility of everything is now so strong and completely unpredictable that anyone cannot anymore really “expect”/predict (like it was more “easy”and concrete before…) what will precisely be any of all their/our real evolutions but just the hopes and dreams of their/our perspectives…

 

[hist78]

I mean sure. But the fact remains TSMC is still vastly outperforming both its rivals and customers. We just saw Intels report. WOOF. We saw Samsungs double WOOF. And UMC just reported a monthly decline. Also apple, amd, nvidia etc are all reporting worse financials than TSMC. Intel is now trading at a P/E either above or exactly equal to TSMC. It’s completely wild. This is not trading advice but I reckon when 13F’s come out next week we are going to see a larger Berkshire stake. The stock will go higher then because the market seems unable to think for itself. LOL.

Berkshire sold about 86.2% of their TSMC holding last quarter 2022. Does it make sense? No, certainly not.

At today's closing on 2/14/2023, Intel has a P/E ratio of 14.73 while TSMC'P/E ratio is 15.09. Does it make sense? No, certainly not.

Currently Intel share price is magically pumped up while TSMC's is depressed. Does it matter? It probably doesn't matter in the long term. A company (like TSMC) who doesn't manipulate its stock price or accounting book will win in the long run.

 

[Mooredaddy]

Berkshire sold about 86.2% of their TSMC holding last quarter 2022. Does it make sense? No, certainly not.

At today's closing on 2/14/2023, Intel has a P/E ratio of 14.73 while TSMC'P/E ratio is 15.09. Does it make sense? No, certainly not.

Currently Intel share price is magically pumped up while TSMC's is depressed. Does it matter? It probably doesn't matter in the long term. A company (like TSMC) who doesn't manipulate its stock price or accounting book will win in the long run.

Yeah hugely surprising for many reasons. I believe Warren is dead wrong in this particular case but maybe he got the profit he wanted out of the trade who knows. In terms of long term investing I don’t know why anyone would sell a single TSMC share personally.

 

[nghanayem]

Yeah hugely surprising for many reasons. I believe Warren is dead wrong in this particular case but maybe he got the profit he wanted out of the trade who knows. In terms of long term investing I don’t know why anyone would sell a single TSMC share personally.

Maybe he wanted to free capital for a higher ror investment. Or he just wants to wait out the slowdown and buy back on the recovery. Either way who cares. I won’t lose even a wink of sleep over TSMC stock only being up 2% over January.

My opinion (not financial advice) that is a fair assessment, long term TSMC will go up. But if like the average stock holder I am holding for less than a year TSMC is either a hold or a sell (definitely not a buy). But if like a smart investor I’m in it for the long haul then I’d say it is a soft buy at the moment, and probably a hard buy at the end of Q1/2 when we would have a better idea of where the logic bottom is.

 

[Nokokara]

Berkshire sold about 86.2% of their TSMC holding last quarter 2022. Does it make sense? No, certainly not.

At today's closing on 2/14/2023, Intel has a P/E ratio of 14.73 while TSMC'P/E ratio is 15.09. Does it make sense? No, certainly not.

Currently Intel share price is magically pumped up while TSMC's is depressed. Does it matter? It probably doesn't matter in the long term. A company (like TSMC) who doesn't manipulate its stock price or accounting book will win in the long run.

Berkshire is not focusing their investments in semiconductor and has been decreasing a lot of investments not only in TSMC (like also Verizon completely divested and 91.4% divested in US Bancorp…)…

These disinvestments are also probably to always further invest/reinvest in other of their big/major companies,
(i) especially like Apple the biggest ~ 40% of their portfolio in which they raised that recently with ~ +18% invested mid of last year…
(ii) which probably also boosted them to invest in TSMC where Apple is the biggest supplier covering a bit more than a quarter (~26%) of TSMC revenue in 2021, a lot in their most advanced technologies…

But apparently Berkshire don’t have any investment in Intel (who is now making no more profit, now loosing net income money like -664M$ in Q42022 (vs +4.62B$ in Q4 2021…) while TSMC is still very and much more profitable at 9.427B$ net income (47.3% of their 19.931B$ revenue…) in Q4 2022.

Intel new CEO, Pat Gelsinger, is a very good “Gold medal singer” who very well set up and described/presented their new IDM 2.0 business model evolution but with still very poor/not yet efficient related operations which are very needed to reinforce/resurrect their business and eventually/hopefully come back to top 1 company in semiconductor…
It is also why Intel is now also becoming with/vs TSMC both
(i) a customer for some of Intel fabless business, especially in most advanced technologies not yet available in their fabs…
(ii) a competitor for some of Intel foundry business (still very marginal…)…

 

[hist78]

Berkshire is not focusing their investments in semiconductor and has been decreasing a lot of investments not only in TSMC (like also Verizon completely divested and 91.4% divested in US Bancorp…)…

These disinvestments are also probably to always further invest/reinvest in other of their big/major companies,
(i) especially like Apple the biggest ~ 40% of their portfolio in which they raised that recently with ~ +18% invested mid of last year…
(ii) which probably also boosted them to invest in TSMC where Apple is the biggest supplier covering a bit more than a quarter (~26%) of TSMC revenue in 2021, a lot in their most advanced technologies…

But apparently Berkshire don’t have any investment in Intel (who is now making no more profit, now loosing net income money like -664M$ in Q42022 (vs +4.62B$ in Q4 2021…) while TSMC is still very and much more profitable at 9.427B$ net income (47.3% of their 19.931B$ revenue…) in Q4 2022.

Intel new CEO, Pat Gelsinger, is a very good “Gold medal singer” who very well set up and described/presented their new IDM 2.0 business model evolution but with still very poor/not yet efficient related operations which are very needed to reinforce/resurrect their business and eventually/hopefully come back to top 1 company in semiconductor…
It is also why Intel is now also becoming with/vs TSMC both
(i) a customer for some of Intel fabless business, especially in most advanced technologies not yet available in their fabs…
(ii) a competitor for some of Intel foundry business (still very marginal…)…

Intel is doing multi-year billions cost cutting. I believe Intel is intentionally to reduce both the cost and unprofitable/noncompetitive business. They hope the revenue lost on the traditional processors business can be offset by the new IDM revenue. That's a tall order.