Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the leading global contract chipmaker and a key supplier for Apple Inc (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA), revealed a 19% decrease in fourth-quarter net profit. Despite challenges stemming from global economic uncertainties affecting chip demand across various applications, including cars, cellphones, and servers, TSMC’s performance exceeded market expectations.
For the October-December period, TSMC reported a net profit of T$238.7 billion ($7.6 billion), down from a robust T$295.9 billion in the same period the previous year. The results, however, surpassed market forecasts, beating the T$226.4 billion LSEG SmartEstimate, which takes into account the projections of consistently accurate analysts.
TSMC, recognized as Asia’s most valuable listed company, disclosed that fourth-quarter revenue experienced a marginal 1.5% year-on-year decline, settling at $19.62 billion. This figure aligned with the company’s prior forecast range of $18.8 billion to $19.6 billion.
In terms of capital expenditure, TSMC reported a fourth-quarter spending of $5.24 billion, a decrease from the $7.1 billion spent in the third quarter. The full-year capital expenditure for 2023 totaled $30.45 billion, slightly below the initial projection of $32 billion. In 2022, the company had incurred a total capital expenditure of $36.29 billion.
As the foremost manufacturer of advanced chips, TSMC faces a challenging industry outlook amid uncertainties. Additionally, the ongoing U.S.-China chip dispute poses potential vulnerabilities for the company.
Despite these challenges, TSMC’s Taipei-listed shares witnessed a remarkable 32% surge in the previous year. On the day of the announcement, the stock recorded a 1.2% increase, outperforming the benchmark index’s 0.4% gain. This performance translated to a market value of $478.3 billion for the company.