World’s largest chipmaker TSMC posts record profit allaying fears over semiconductor headwinds

Signage for Taiwan Semiconductor Manufacturing Co. (TSMC) is displayed at the company’s headquarters in Hsinchu, Taiwan, on Wednesday, June 5, 2019.

TSMC, the world's biggest chipmaker, posted record net profit in the second quarter, helping to alleviate fears over weak demand from high inflation and a surplus of some chips on the market.

The three-month period ended June 30 has some key numbers.

• Revenue of 534.14 billion Taiwanese dollars ($18.16 billion), a rise 43.5% year-on-year. That beat the 524.02 billion Taiwan dollar average from analyst estimates compiled by Refinitiv.
• Net income of 237.03 billion Taiwanese dollars, up 76.4% year-on-year and ahead of estimates. That was a record quarter in terms of net income for TSMC.

The company which is Apple's most important chip supplier said it expects revenue to be between $19.8 billion and $20.6 billion in the third quarter.

Some of the company's capital expenditures would be pushed out into the future. Delivery times for some chipmaking equipment are being extended.

The careful path chipmakers are walking at a time of concern about rising prices and the impact on consumer demand is highlighted by the strong results and outlook.

There are a lot of worries, including supply chain disruptions, the Russia-Ukraine war, and rising materials costs. There was a warning last month from the U.S. chipmaker.

The results of TSMC have allayed some of the concerns in the chip market and the company itself.

The analyst at China Renaissance said that TSMC is a class of its own.

He said that the guidance from TSMC indicated that it will continue to grow even if the chip market is down.

Some of the most advanced manufacturing processes in the world can be found at TSMC. The company said it saw weakness in the consumer market, but its data center and automotive business were unaffected.

Concerns have been raised about a potential chipglut in the market. Weak demand could put pressure on the prices of chips.

The current adjustments being made look like a typical cycle for Semiconductor, according to TSMC.

The current cycle is expected to be similar to a typical cycle with a few quarters of inventory adjustment.