TSMC reports Q2 revenue down 10% YoY to ~$15.68B and net income down 23.3% YoY to ~$5.9B, the first quarterly decline since 2019, as all non-AI chip sales slump
And Those Of Others Larry Dignan / Constellation Research : TSMC's Q2: 6 takeaways to know CNBC : TSMC reports first profit drop in 4 years as electronics demand slump continues Andrew Jolly / HPCwire : TSMC Announces Q2 Revenue Fall, Expects Q3 Rebound Fueled by 3nm Tech Priya Raghuvanshi / Business Today : TSMC flags 10% fall in 2023 sales as weak global outlook weighs Deng Li / Huawei Central : First time in 4 years, Chip maker TSMC faces profit decline Ibukun Ogundare / Coinspeaker : TSMC Reports First Profit Decline since 2019 in Q2 2023 Financial Times : TSMC: betting against Warren Buffett may pay off this time Dave James / PC Gamer : TSMC is delaying its Arizona foundry over a lack of skilled workers alongsde a $5.85B income slump South China Morning Post : Chip giant TSMC cuts revenue outlook amid persistent market slump Kathrin Hille / Financial Times : TSMC warns over deepening slump in chipmaking sector Rob Thubron / TechSpot : TSMC reports first profit decline in four years amid global economic challenges, delays Arizona plant James Lee Taylor / Sammy Fans : Samsung rival TSMC profit declined in Q2, first time in four years Reuters : TSMC Q2 profit falls 23%, beats market expectations Gaurav Girotra / Tech in Asia : TSMC reports first profit dip since 2019 as electronics demand nosedives Yang Jie / Wall Street Journal : TSMC says its Arizona factory will miss its target to mass produce 4nm chips by 2024 due to a shortage of US expertise in building fabs, aiming instead for 2025 LinkedIn: Robert Ehlers : This is disappointing. TSMC has to delay production for a year due to labor shortages at the new Phoenix FAB. — This is a real problem for the US. … Twitter: Dan Nystedt / @dnystedt : 16/16 TSMC on AI TSMC CEO C.C. Wei AI megatrend to fuel TSMC's long term growth, as generative AI requires more chip with higher computing power, interconnect bandwidth, etc. “Today, server AI processor demand, which we define as CPUs, GPUs and AI accelerators..., accounts... @iancutress : My usual $TSM @TSMC graphs updated for Q2. Highlights: ➡ Almost 1m wafers less in a quarter from last year ➡ Average $/wafer still north of $5k (not accounting for IP) ➡ 8pts GM lost in 2Q ➡ 7nm revenue up QoQ but 5nm down ➡ 65nm revenue up again, almost double 3Q21 [image] @savvytrader : Taiwan Semiconductor's $TSM Q2 earnings visualized [image] Dan Nystedt / @dnystedt : TSMC 2nd Quarter Earnings Revenue -13.7% year-on-year to US$15.68 billion, at high end of guidance: US$15.2-$16 billion NT$ Revenue NT$480.84 bln, market expected NT$476.2 bln Gross Margin 54.1% vs guidance 52%-54% Operating Margin 42% vs guide 39.5%-41.5% Net Profit -23.3%... @thetranscript_ : TSMC Chair: The short-term frenzy about AI demand definitely cannot be extrapolated for the long term. Neither can we predict for next year how the sudden demand will continue or flatten out" $TSM $TSMC Sasha Yanshin / @sashayanshin : TSMC manufactures the A100 and H100 chips for Nvidia... The stock market says Nvidia has a queue round the block to buy those chips because AI bro. Today TSMC posted a 10% drop in revenue and a 23% drop in profit for Q2. But but but AI bro! https://www.cnbc.com/... Eugene Ng / @eugeneng_vcap : TSMC on AI demand. “Today, server AI processor demand, which we define as CPUs, GPUs and AI accelerators..., accounts for approximately 6% of TSMC's total revenue. We forecast this to grow at close to 50% CAGR over the next 5-years and increase to a low-teens percent of our... @briantycangco : $TSM reports “better than expected” 23% decline in 2Q23 NPAT. But here's what I'm seeing: - Forecast of 10% drop in FY23 revenue 🚨 - 2Q23 OCF fell 50.5% ‼️ - 2Q23 Operating Margins down 710bps YoY 👀 - Trailing PE 16.7X; Fwd PE 22-23X If they say TSMC is the semiconductor... Forums: r/Sino : TSMC delays U.S. chip plant start to 2025 due to labor shortages. Who could have predicted this? r/anime_titties : TSMC delays U.S. chip plant start to 2025 due to labor shortages
Context & Ripple Effects
TSMC’s preliminary Q2 sales release had already shown that AI-chip demand helped revenue exceed expectations despite a broader downturn. This fuller result, including the profit decline, shows that AI demand was not yet large enough to offset weakness across the rest of its chip business.
First-order effects
- TSMC’s revenue and profit contract, putting near-term pressure on its non-AI manufacturing business while AI-related production remains the relative source of resilience.
- Customers tied to Nvidia’s A100 and H100 accelerators remain important demand support; the earlier AI-driven revenue beat underscores the contrast with weaker non-AI orders.
Second-order effects
- The uneven demand mix makes capacity planning harder: TSMC must serve AI-related demand while avoiding overcommitting capacity to depressed non-AI segments.
- The results reinforce the gap between AI-chip demand and the wider chip market, leaving customers and suppliers exposed to a more selective recovery rather than a uniform rebound.
Third-order effects
- If AI demand continues to diverge from other semiconductor categories, leading-edge foundry economics may become increasingly dependent on a narrower set of AI workloads and customers.
- This is a reminder that AI-led resilience in chip sales can coexist with a contracted semiconductor cycle; whether it becomes a durable structural split depends on how broadly demand recovers beyond AI.
The trend: The story is one data point in the widening split between AI infrastructure demand and the broader semiconductor cycle.