TSMC cuts capex outlook after record 3Q22 profit

Jessie Shen, DIGITIMES Asia, Taipei 0

TSMC has revised downward its capex target this year after posting record net profits for the third quarter.

TSMC revised its capex outlook for 2022 to US$36 billion - still a record high - down from the about US$40 billion estimated previously.

TSMC reported net profits increased 18.5% sequentially to a record high of NT$280.87 billion (US$8.8 billion) for the third quarter of 2022, with EPS reaching NT$10.83.

TSMC saw its gross margin exceed 60% in the third quarter, when revenue grew 14.8% on quarter to NT$613.14 billion. In US dollar, TSMC's revenue surged 35.9% on year and 11.4% sequentially to US$20.23 billion. The results beat the company's guidance given in mid-July.

TSMC's gross margin climbed 9.1pp from a year earlier and 1.3pp sequentially to 60.4% in the third quarter, with operating margin rising 9.4pp on year and 1.5pp on quarter to 50.6%. Both results also topped the company's estimates.

"Our third quarter business was supported by strong demand for our industry-leading 5nm technologies," said Wendell Huang, VP and CFO of TSMC.

TSMC disclosed sales generated from 5nm process technology accounted for 28% of total wafer revenue in the third quarter. Advanced technologies, defined as 7nm and more advanced technologies, accounted for 54% of total wafer revenue during the quarter.

"Moving into fourth quarter 2022, we expect our business to be flattish, as the end market demand weakens, and customers' ongoing inventory adjustment is balanced by continued ramp-up for our industry-leading 5nm technologies," Huang indicated.

TSMC expects to post revenue of between US$19.9 billion and US$20.7 billion in the fourth quarter of 2022, with gross margin and operating margin estimated at 59.5-61.5% and 49-51%, respectively.