Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), the world’s biggest contract chipmaker and a lead supplier for Apple Inc., stock rose 2.12% (As on July 15, 10:57:35 AM UTC-4, Source: Google Finance) after the company in the first quarter of FY 22 has reported the biggest quarterly profit jump in two years and said it was “highly confident” heading into the second half of the year. The earnings for the three months ending in June surged 76.4% from last year to just under $8 billion, with revenues rose 36.6% to $18.16 billion. The industry bellwether said third quarter sales could come in between $19.8 billion and $20.6 billion, powered by sales of 5G and artificial intelligence chips. For the third quarter 2022, the company expects the business to be supported by continued demand for the industry-leading 5nm and 7nm technologies. The second quarter business was supported by HPC, IoT and Automotive-related demand. The company ended the second quarter with cash and marketable securities of TWD 1.4 trillion. During the second quarter, we generated about TWD 339 billion in cash from operations, spent TWD 218 billion in CapEx and distributed TWD 71 billion for third quarter ’21 cash dividend.
Moreover, year-over-year, second quarter revenue increased 43.5% while net income and diluted EPS both increased 76.4%. Compared to first quarter 2022, second quarter results represented an 8.8% increase in revenue and a 16.9% increase in net income. Gross margin for the quarter was 59.1%, operating margin was 49.1%, and net profit margin was 44.4%. In the second quarter, shipments of 5-nanometer accounted for 21% of total wafer revenue; 7- nanometer accounted for 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 51% of total wafer revenue.
On the other hand, the House version of a Senate bill passed in 2021 would also, in part, provide around $52 billion in subsidies for U.S. chipmakers in order to help increase production and ween the industry from its reliance on Asia-made products. U.S. Secretary of Commerce Gina Raimondo said Wednesday that Congress could “carve out” the $52 billion aimed at the chip sector from the larger competitiveness bill and hopefully get the slimmed-down version passed before the August 4 recess.
For the third quarter, the company expects gross profit margin is expected to be between 57.5% and 59.5% and Operating profit margin is expected to be between 47% and 49%.