TSMC Q2 profit falls 23%, but beats estimates

investing.com:

Investing.com — Taiwan Semiconductor Manufacturing Co (NYSE:TSM) (TW:2330), or TSMC, logged a higher-than-expected second-quarter profit as revenue from chip sales remained steady, although earnings were lower than last year as chip demand softened. 

The firm, which is the world’s largest contract chipmaker, and also a key supplier to Apple Inc (NASDAQ:AAPL) and Nvidia Corporation (NASDAQ:NVDA), said net profit in the three months to June 30 fell 23% to 181.80 billion Taiwan dollars ($1 = T$31.07), compared to T$237 billion a year ago. The figure was well above a Reuters estimate of T$172.5 billion.

While the year-on-year decline in profit was partially due to a strong performance last year, it also reflects a slowdown in semiconductor demand through 2023, amid rising interest rates and worsening global economic conditions.

TSMC logged a slightly stronger profit in the first quarter. But the chipmaker had warned that conditions were set to deteriorate in the coming months, as chip demand dried up.

Still, Asia’s most valuable listed company had forecast an improvement in the second half of 2023, as its biggest customers begin refiling their inventories. 

The firm is now set to provide third-quarter earnings guidance in an upcoming webcast.

Nvidia, one of TSMC’s biggest customers, also forecast a resurgence in chip demand this year, driven chiefly by increasing interest in artificial intelligence amid the growing popularity of generative AIs such as Chat GPT. AI programs require a high amount of computing power to operate, and also utilize purpose-built chips, which Nvidia says are set for a demand boom this year.

Recent media reports said that even Apple was planning on joining the AI race. 

TSMC’s quarterly revenue came