Taiwan Semiconductor Stock (TSM): Why The Price Went Up Today

By Amit Chowdhry ● Jan 13, 2022
  • The stock price of Taiwan Semiconductor Manufacturing Company (NYSE: TSM) increased by over 5% during intraday trading today. This is why it happened.

The stock price of Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) increased by over 5% during intraday trading today. Investors responded positively to the company’s fourth-quarter results.

The company announced consolidated revenue of NT$438.19 billion, net income of NT$166.23 billion, and diluted earnings per share of NT$6.41 (US$1.15 per ADR unit) for the fourth quarter ended December 31, 2021. The year-over-year fourth-quarter revenue increased 21.2% while net income and diluted EPS both increased 16.4%. Compared to the third quarter of 2021, the fourth quarter results represented a 5.7%  increase in revenue and a 6.4% increase in net income. All figures were prepared in accordance with TIFRS on a consolidated basis.

In US dollars, the fourth-quarter revenue was $15.74 billion, which increased 24.1% year-over-year and increased 5.8% from the previous quarter. And the gross margin for the quarter was 52.7%, the operating margin was 41.7%, and the net profit margin was 37.9%.

For the fourth quarter, shipments of 5-nanometer accounted for 23% of total wafer revenue; 7-nanometer accounted for 27%. And advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 50% of total wafer revenue.

Based on the company’s current business outlook, management is expecting the overall performance for the first quarter of 2022 to be as follows:

— Revenue is expected to be between US$16.6 billion and US$17.2 billion;

And, based on the exchange rate assumption of 1 US dollar to 27.6 NT dollars,

— Gross profit margin is expected to be between 53% and 55%;

— Operating profit margin is expected to be between 42% and 44%.

Management further expects the 2022 capital budget to be between US$40 billion and US$44 billion.

KEY QUOTE:

“Our fourth quarter business was supported by strong demand for our industry-leading 5-nanometer technology. Moving into first quarter 2022, we expect our business to be supported by HPC-related demand, continued recovery in the automotive segment, and a milder smartphone seasonality than in recent years.”

— Wendell Huang, VP and Chief Financial Officer of TSMC

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.