Taiwan Semiconductor Manufacturing Company (TSM) Expected to Report Decline in Q2 Net Profit, Optimistic Outlook for Q3


  • TSM is expected to report a 27% decline in second-quarter net profit, reflecting global economic challenges impacting semiconductor demand.
  • Analysts anticipate a rebound in TSM’s profitability in the third quarter, driven by AI applications and the launch of new iPhones before the year-end holiday season.
  • Despite the Q2 decline, TSM’s stock has seen a significant increase of almost 30% this year, outperforming the broader market, fueled by positive prospects for AI applications.

Taiwan Semiconductor Manufacturing Company (TSM) is experiencing a decline in its share value due to reports indicating an expected 27% drop in net profit for the second quarter. The semiconductor industry is facing challenges caused by global economic difficulties, leading to lower demand. However, analysts predict that TSM’s business performance will likely improve in the current quarter.

TSM, the primary supplier for tech giants Apple Inc and Nvidia Corp, is anticipated to report a net profit of T$172.53 billion ($5.58 billion) for the April-June period, compared to T$237.0 billion the previous year. This decline in profit is partly attributed to a correction following the recovery from the pandemic. Analysts at Fubon Investment in Taiwan believed that the second quarter would mark the low point of the current downcycle. Although the situation is expected to improve in the third quarter, it may be weaker than usual due to ongoing inventory build-ups.

Despite the challenges faced in the second quarter, TSM is optimistic about the future. A senior fund manager in Taiwan expressed confidence that profits would bounce back in the third quarter, driven by anticipated demand for artificial intelligence (AI) applications and the upcoming launch of new iPhones before the year-end holiday shopping season. Historically, the tech industry experiences a slow period in sales during the second quarter, with demand typically picking up in the third quarter and towards the year-end shopping season. The positive outlook for AI applications has contributed to TSM’s stock performing well, with its Taipei-listed stock rising almost 30% this year, outperforming the broader market.


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