TSMC’s Profit Struggles—The iPhone 15 Won’t Be the Savior
In the July 2023 earnings report, analysts warned that TSMC’s profits were set to take a dip, but they still clung to the hope that the launch of the iPhone 15 could turn things around. Yet, the latest numbers, though better than feared, still fell short of expectations, with the company suffering its steepest decline since Q1 of 2019.
Key Takeaways
- Profit Drop: The most significant slump in years.
- Market Sentiment: “We’ll bounce back with the iPhone 15,” said analysts.
- Reality Check: Even with the updated figures, the company’s earnings lag behind what investors hoped for.
Why the iPhone 15 Isn’t Enough
While the iPhone 15 is expected to drain a huge chunk of consumer spending, TSMC’s margins are being squeezed by rising supply‑chain costs and fierce competition. The profit outlook remains uneasy until more positive cash flow emerges from other product lines.
Bottom Line
TSMC’s profit woes are real, and the iPhone 15 launch alone won’t erase the losses yet. Investors will have to watch how the company capitalizes on other markets before the Wall Street narrative turns positive.
TSMC’s Q3 Earnings: A Rough Patch but a Silver Lining Ahead
Quarterly Numbers at a Glance
- Q3 profit: $6.69 billion (down 10.83% YoY)
- Net income: ‑24.87% compared to the previous year
- Apple’s share of annual revenue: roughly 23%
Why The Numbers Are Tough
TSMC blames a mix of factors for the dip. While the 3‑nanometer chip rollout was running smoothly, it didn’t fully make up for customers clearing out inventory. These inventory adjustments blurred the numbers, pulling the company’s gross profit down.
Looking Forward: A Q4 Boost on the Horizon
CEO CC Wei has his crystal ball set on a rebound. “We anticipate a clear lift in Q4, driven by the strong ramp-up of 3‑nm technology,” says Wei. This optimistic outlook suggests that the company believes the continued demand for cutting‑edge chips will start to turn things around.
Key Takeaways
- Apple remains a major revenue driver, composing nearly a quarter of TSMC’s earnings.
- Inventory clearing by clients has muted the impact of the successful 3‑nm ramp.
- CEO’s confidence in Q4 indicates optimism, especially as tighter integration of the newest tech offers new revenue streams.
Bottom Line
Despite a financially challenging Q3, TSMC’s upgraded chip offerings are putting the company in a strong position for a recovery in Q4. Monitor how Apple’s updates and other tech partnerships unfold as the company gears toward a brighter upcoming quarter.
