Taiwan Semiconductor stock surges despite weakened guidance on Q4 earnings

Shares of Taiwan Semiconductor are moving higher even amid the company's weak guidance for fourth-quarter earnings.

Video transcript

DAN HOWLEY: TSMC, they announced their Q4 earnings, laying out weaker than expected guidance for the coming quarter. They said that revenue will be between 16.7 billion and 17.5 billion. Analysts wanted 17.9 billion. But they say in 2023, the semiconductor market is going to decline about 4%. The foundry industry, meanwhile, is going to decline 3%. There, TSMC saying that they see revenue declining between the mid to high single digits versus the same period last year.

But oh, wait, the second part of the year, they're going to pick things up again. So while everyone else is floundering, they're going to be able to finish the year on the plus side. So they're looking pretty good for their outlook. They say they're cutting costs internally to help manage profitability.

And this is something that we've seen throughout the entire semiconductor industry, whether it's Intel, AMD, Nvidia, or the foundries really kind of trying to figure out how they can get back to profitability or return to growth-- not profitability-- return to some meaningful growth, as we talk about this kind of glut that we had, or have, in terms of chips.

DAVE BRIGGS: Yeah, and some of it is not in their control. And their CEO in some commentary this morning, saying, we continue to observe softness in the consumer end market segment. He really talked about supply chain snarls still being the brunt of their problem across the industry. I hadn't realized that we're still not all the way back. And then he added, to your point there, we expect revenue to decline mid to high single digits, but then, yes, second half of this year, they expect things to turn around because the supply chain clears up, and then they start popping. So be patient.