Analysts forecast TSMC profit dip, steady Apple chip orders

TSMC is expected to announce a 23% drop in profit for the fourth quarter, but analysts say Apple will continue to keep its orders "steady" for the immediate future.

Apple chip partner TSMC is anticipated to report a net profit of T$226.4 billion ($7.21 billion) for the three-month period ending in December, analysts forecast, ahead of Thursday's results release for the company.

The figure, compiled by LSEG SmartEstimate from 20 analysts and reported by Reuters, is a considerable drop from the year-ago quarter's T$295.9 billion in net profit.

Revenue for the quarter reached T$625.5 billion ($20.1 billion), based on calculations on TSMC-released data, which is a mild improvement on the year-ago period.

In explaining the forecasts, it is reckoned that a number of factors are impacting the quarter, including reduced global demand for semiconductors in the second half of 2022. With reducing inventories for smartphone and computer producers, restocking should increase demand.

The profit change is also impacted by comparing against strong performance in 2022, thanks to strong demand from Apple and Nvidia, TSMC's major clients.

Turning to the first quarter, and analysts are being positive about TSMC's outlook. Fubon Securities, who previously were concerned about TSMC's first quarter, now believe Apple's wafer demand will be "steady in the short term." Though a seasonal slowdown is expected for the quarter, the analysts "have not seen additional order cuts."