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Semiconductor manufacturing in Taiwan (TSM), the world’s leading chip foundry, met second-quarter earnings expectations on Thursday. He also guided a sales surge in the third quarter. But TSM stock fell early in the session.
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Taiwan Semi gained 93 cents per US share in the June quarter, up 18% year-on-year and in line with analyst estimates. The company’s sales rose 28% to $ 13.29 billion in the second quarter.
In local currency, sales of Taiwan Semi increased 19.8% year-on-year while profits increased 11.2%.
For the third quarter, Taiwan Semi expects revenue of $ 14.6 billion to $ 14.9 billion. The midpoint of $ 14.75 billion has beaten Wall Street’s consensus estimate of $ 14.57 billion. Its sales during the period of the previous year were $ 12.4 billion.
TSM stock drops after earnings report
In pre-market trading in the stock market today, TSM stock fell 2.6%, to nearly 121.15.
“Our second quarter business was primarily driven by continued strength in HPC (High Performance Computing) and automotive-related demand,” CFO Wendell Huang said in a press release.
He added, “As we approach the third quarter of 2021, we expect our business to be supported by strong demand for our state-of-the-art 5 nanometer and 7 nanometer technologies, driven by the four growth platforms, which are smartphones, HPC, IoT (Internet of Things) and automotive related applications. “
Circuit widths on chips are measured in nanometers, or one billionth of a meter.
In the second quarter, shipments of 5 nanometer chips accounted for 18% of the company’s total wafer sales. And 7-nanometer chips accounted for 31% of wafer revenue.
Taiwan Semi Stock Consolidation
Taiwan Semi sales in June were boosted by the start of production of iPhone 13 chips. Analysts expect Apple (AAPL) to present its next smartphones in September.
Taiwan Semi manufactures chips for a multitude of factory-less semiconductor companies, including AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).
TSM stock has consolidated over the past 22 weeks with a buy point of 142.30, according to IBD MarketSmith charts. The buy point is 10 cents above the all-time high of 142.20 reached on February 16.
Follow Patrick Seitz on Twitter on @IBD_PSeitz for more articles on consumer technology, software, and semiconductor stocks.
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