Taiwan Semi Posts First Fall in Monthly Revenue in Years as Macro Headwinds Hit Chips

https://www.barrons.com/amp/articles/taiwan-semiconductor-manufacturing-revenue-4ba5eeaa

Taiwan Semiconductor Manufacturing reported its first drop in monthly revenue in almost four years as macroeconomic headwinds hit the world’s largest maker of computer chips, putting the group’s first-quarter earnings due April 20 in the spotlight.

TSMC (ticker: TSM) reported revenue of 145.4 billion Taiwanese dollars in March ($4.8 billion), down 11% from February and falling 15% from March 2022. It’s the first annual drop in monthly revenue since May 2019, according to Dow Jones Newswires.

The chip making giant flagged in January that “as overall macroeconomic conditions remain weak, we expect our business to be further impacted by continued end market demand softness, and customers’ further inventory adjustment” in the first quarter.

But softness in March may have ushered in a poorer performance than expected for the first three months of 2023, which has the potential to bite investors.

TSMC disclosed in its monthly report that January through March revenue was NT$508.6 billion, up 3.6% from the first quarter of 2022 and—at $16.7 billion in U.S. dollars—at the bottom of the previous range of $16.7 billion to $17.5 billion. Analysts expected a better performance to start the year, with the consensus first-quarter revenue estimate among brokers surveyed by FactSet as of Monday remaining at NT$525.9 billion.

Now that TSMC has disclosed lower revenue in March, leading to first-quarter sales at the bottom of its forecast, analysts’ estimates could be revised lower.