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“While AI-related demand continues to be strong, it is not enough to offset the overall cyclicality of our business.”
That’s Taiwan Semiconductor CEO CC Wei, commenting after the contract chipmaker reported results.
Taiwan Semiconductor
TSM,
2330,
said its third-quarter net profit fell by 25% to NT$211 billion, as sales fell by 11% to NT$546.73 billion ($17.3 billion). According to FactSet, its earnings of $1.26 per U.S.-listed share beat analyst estimates of $1.15.
The Nvidia
NVDA,
supplier’s operating margin of 41.7% came in above its own expectations that ranged from 38% to 40%.
Revenue is expected to be between US$18.8 billion and US$19.6 billion for the fourth quarter, on an operating margin between 39.5% and 41.5%. Analysts polled by FactSet expected revenue of $18.54 billion.
U.S.-listed shares rose 2% in premarket trade.
“Due to the persistent weaker overall macroeconomic conditions and slow demand recovery in China, customers remain cautious in their inventory control. Thus, we expect the inventory digestion to continue in the fourth quarter. Having said that, we are observing some early sign of demand stabilization in the PC and smartphone end market,” said Wei, according to a transcript from S&P Global Market Intelligence.
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