TSMC Denies Rumors of Revenue Guidance Cut, But Analysts Still See 10% Drop in 2023

Earlier this year, TSMC‘s stock price declined slightly, forcing the company to essentially reduce it’s revenue guidance two times in a single year. Now, there were rumors that this step would be taken again, keeping in mind how the industry has been slow, but the company refuted these claims, in a media briefing.

In their July report, TSMC had already lowered it’s expectations for 2023, due to industry challenges like a lack of free cash flow. This has not only hurt the company’s stocks, but has also led to analysts claiming that, more than 10% revenue drop is expected this year.

Keep in mind that earlier the same year, this number was well in the lower single digits. In the July report, it was as low as 3.7%.

At the moment, things don’t look very good for TSMC, but the situation is bound to improve due to increasing demand for Apple chipsets later this year. TSMC itself forecasts about a 20% dip in revenue (USD), as compared to the last year.

In the media briefing, TSMC’s representatives made it clear that their financial situation is affected by a lot of factors, such as borrowing money via corporate bonds and investing in US bonds.

They say that these things might not show up completely in regular financial reports, and that it’s not right to judge how much they can pay in dividends just by looking at how much free cash they have. According to the analysts, the firm’s cash investments should also help it feather out any drops in its cash flows.

As far as “inventory turnover days” are concerned (time it takes to manufacture and deliver new orders), TSMC said that, at the moment, they haven’t fully perfected it yet, so it might take some time. Keep in mind that the company is also building it’s second 2nm manufacturing facility in Taiwan, to meet mass production deadlines, however it is facing government approval issues, which, in turn might slow revenue down even more.

…the inventory turnover days represent the change in the IC design industry upstream of the semiconductor, but if it is in the fab, it will only represent the time from receiving orders to output, so the TSMC inventory turnover days are lengthened, which mainly represents that the yield of the 3nm process has not yet reached a high level, so the number of orders received is large, the yield is not high, and it naturally takes longer days to produce the number of wafers required by customers.

UDN

This is all we know for now, but rest assured that we will keep you updated as new information becomes available.