Leading Contract Chipmaker TSMC Fails To Impress Analysts

• Wall Street banks shifted to a bearish stance on Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM), cautioning that the biggest chipmaker will issue conservative guidance for its revenue outlook due to weak demand.

• The primary Apple Inc (NASDAQ: AAPL) supplier will likely report earnings for the last quarter on January 12, Bloomberg reports.

• Both Goldman Sachs Group, Inc (NYSE: GS) and UBS Group AG (NYSE: UBS) expect TSMC’s sales to be flat in 2023, with UBS slashing its price target by 7.4%.

• “TSMC is not immune to the industry inventory digestion and end-demand correction into 2023,” UBS analysts noted. “We lower our 2023 revenue estimate from 3% growth to flat YoY in USD, considering the weaker consumer demand and decelerating high-performance computing growth,” Bloomberg wrote.

• TSMC’s shares plunged 34% from a peak last January as spending on big-ticket items from smartphones to laptops and servers fell after central banks hiked interest rates to counter the mounting inflation.

• TSMC’s sales rose approximately 43% in 2022 and will likely slow to 6.3% in the current year, Bloomberg analysts projected.

• While a healthy recovery is likely in the year’s second half, “the pace of demand rebound could be slower than the company expects as there is still lack of clear signs of end demand recovery,” Goldman Sachs analysts noted.

• Price Action: TSM shares traded higher by 1.09% at $74.85 in the premarket on the last check Wednesday.

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