TSMC expects its second-quarter revenue in US dollar terms to register a sequential decline of 6.7% at the midpoint, with gross margin and operating margin estimated at 52–54% and 39.5–41.5%, respectively. Revenue is estimated at between US$15.2 billion and US$16 billion which is base on the exchange rate assumption of one US dollar to 30.4 NT dollars.
TSMC reported net profits of NT$206.99 billion (US$6.76 billion) on revenue of NT$508.63 billion for the first quarter of 2023, with EPS coming to NT$7.98. Profits increased by a slight 2.1% from the same period in 2022 but fell 30% on quarter, with revenue slipping 18.7% sequentially but growing 3.6% on year.
TSMC's first-quarter revenue in US dollar terms came to US$16.72 billion, coming in at the low end of the company's guidance that was done based on the exchange rate assumption of one US dollar to 30.7 NT dollars.
TSMC saw its gross margin slide 5.9pp sequentially to 56.3% in the first quarter of 2023, when operating margin dropped 6.5pp on quarter to 45.5%. Both margins came above the company's guidance range given in January.
"Our first quarter business was impacted by weakening macroeconomic conditions and softening end market demand, which led customers to adjust their demand accordingly" said Wendell Huang, VP and CFO of TSMC. "Moving into second quarter 2023, we expect our business to continue to be impacted by customers' further inventory adjustment."
Advanced technologies, defined as 7nm and more advanced process nodes, accounted for 51% of TSMC's total wafer revenue in the first quarter of 2023. Sales generated from 5nm process technology accounted for 31% of revenue during the quarter, compared with 32% in the fourth quarter and 20% in first-quarter 2022. As a proportion of TSMC's total wafer sales, 7nm slid to 20% in the first quarter from 22% in the prior quarter and 30% a year earlier.
TSMC had 44% of total wafer sales generated from the HPC sector in the first quarter, while the smartphone segment declined as a proportion of total wafer sales to 34% from 38% in the prior quarter and 40% a year ago. Automotive as a proportion of TSMC's total wafer sales came to 7% compared with 5% during the same period in 2022.
Automotive was the only device category TSMC is targeting that witnessed sequential growth in the first quarter, while sales from the HPC, smartphone, IoT, and digital CE segments fell 14%, 27%, 19%, and 5%, respectively, on quarter.
North America remained the largest market of TSMC, but the region as a proportion of total wafer sales slid to 63% in the first quarter from 69% in the fourth quarter of 2022. China as a proportion of total wafer sales climbed to 15% from 12% in the prior quarter.
