In the third quarter, Taiwan Semiconductor Manufacturing Co.‘s (TSMC) revenue exceeded experts’ predictions and came in at $19.4 billion. The corporation announced on Friday that Q3 2022 earnings were 48% greater than they were in the corresponding quarter a year prior.

TSMC Q3 2022 Revenue Hits High

According to the sources, the cumulative NT$613.14 billion ($19.382 billion) revenue for TSMC for the months of July (NT$186.76 billion), August (NT$218.13 billion), and September (NT$208.25 billion) are over 48% higher than in Q3 2021.

TSMC performs differently from other semiconductor companies. A $1.1 billion sales warning was recently issued by AMD, and last week Kioxia reduced the amount of 3D NAND wafers that were being produced.

Considering reducing demand, TSMC Q3 2022 revenue reached an all-time peak — credits – thehindu.com

While sales of its partners’ products are declining as a result of growing inflation and geopolitical concerns, there are several reasons why TSMC’s results are improving. First off, TSMC has been successful in increasing its market share recently, especially when it comes to cutting-edge nodes. Second, because it outperforms rival contract chip makers, the business can raise prices, which boosts its revenue.

The third quarter of 2022 was extremely successful for TSMC because the chip contract maker raised the production of many high-profile products from its important clients. In particular, TSMC started producing AMD’s forthcoming RDNA 3 architecture GPUs and accelerated production of AMD’s most current Zen 4-based desktop and server processors.

The foundry also increased the output of M2 system-on-chips for PCs and Apple’s A15 Bionic and A16 Bionic SoCs for smartphones. Finally, TSMC started manufacturing Nvidia’s Ada Lovelace graphics processors and Hopper GH100 computing GPUs. All of these devices utilize pricey leading-edge nodes (N4, N5, 4N, etc.), which explains how TSMC was able to increase its profits even as consumer chip demand is declining.

Factors that Increase Investors’ Concerns

TSMC now holds a larger share of the market than it did a few years ago, but according to Bloomberg, the company’s capitalization fell 29% this year as a result of investors’ worries about a significant revenue downturn in the months to come as fabless chip designers reduced their orders in response to waning demand.

Investors’ worries about TSMC are also heightened by the company’s investments in new facilities in Taiwan and abroad (the U.S. and Japan). According to Morgan Stanley analysts, the second half of 2023 will see a rise in chip demand once more. Investors are nonetheless concerned about the company’s profitability even though TSMC’s new production capacity has not yet started operating.

As TSMC strives to meet customer diversification requests and rises to the challenging task of competitive pressure from Samsung and Intel, the overseas capacity expansion will be front and center for the time being, particularly in the U.S. and Japan, according to Charles Shum, an analyst with Bloomberg Intelligence, in a note to clients. Its gross margin is constrained by rapidly increasing depreciation and material costs and growing demand uncertainties for smartphones.