Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, on Wednesday reported new quarterly high net profits for the third quarter, as its gross margin improved to top 60 percent.
In a statement, TSMC said it posted NT$280.87 billion (US$8.8 billion) in net profits, up 18.5 percent from a quarter earlier and also up 79.7 percent from a year earlier.
At an investor conference closely watched by the market, TSMC said its earnings per share (EPS) for the July-September period stood at NT$10.83, compared with NT$9.14 in the second quarter and NT$6.03 over the same period of last year.
In the third quarter, TSMC’s gross margin — the difference between revenue and the cost of goods sold — rose to 60.4 percent from 59.1 percent in the second quarter. This figure also grew 51.3 percent year-over-year.
The third quarter gross margin also beat the company’s earlier forecast of between 57.5 percent and 59.5 percent.
“The third quarter’s EPS topped the forecast of NT$9.11 by my brokerage,” Mega International Investment Services Corp. analyst Alex Huang said. “In addition to an improvement in cost control, I think the bigger factor behind the higher bottom line was a weaker Taiwan dollar.”
In mid-July, TSMC gave its guidance for the third quarter based on an assumption that the exchange rate would be NT$29.70 against the U.S. dollar. At the end of the third quarter, the U.S. dollar soared to NT$31.743 against the Taiwan dollar at a time when the U.S. Federal Reserve acted aggressively to raise its key interest rates to fight inflation.
In the third quarter, TSMC’s consolidated sales hit US$20.23 billion or about NT$613.14 billion, which rose 14.8 percent from the second quarter and hit a new high.
TSMC said chips made on its advanced 5-nanometer process accounted for 28 percent of its total sales in the third quarter, while chips made on the 7nm process made up another 26 percent. The 5nm process is the latest technology TSMC has brought into commercial production, and the more sophisticated 3nm process is scheduled to enter mass production later this year.
In the first nine months of this year, TSMC posted NT$720.63 billion in net profits, up 67.5 percent from a year earlier, with EPS at NT$27.79. Its gross margin for the nine-month period also rose 7.3 percentage points from a year earlier to reach 58.5 percent.
Source: Focus Taiwan News Channel