SWKS - Semiconductors mixed despite Taiwan Semiconductor strong Q2 results guidance

Despite Taiwan Semiconductor ( NYSE: TSM ) posting strong second-quarter results on Thursday and stating it was "highly confident" about its future, semiconductor stocks were largely negative on Thursday.

Taiwan Semi ( TSM ) shares rose more than 1.5% to $82.64 in premarket trading. TSM client Advanced Micro Devices ( NASDAQ: AMD ) rose less than 1%, due largely to an upgrade .

However, Nvidia ( NASDAQ: NVDA ), Marvell Technologies ( MRVL ), Qualcomm ( QCOM ) and Intel ( INTC ) all fell fractionally, while other chipmakers, such as Qorvo ( QRVO ), Skyworks Solutions ( SWKS ) and Micron Technology ( MU ) fell 1%.

For the period ending June 30, Taiwan Semiconductor ( TSM ) earned $1.55 per share on $18.16B in revenue, compared to estimates of $1.50 per share and $17.58B in revenue. Gross margin for the quarter came in at 59.1%, while operating margin and net profit margin clocked in at 49.1% and 44.4%, respectively.

Looking ahead, Taiwan Semiconductor ( TSM ) said it expects third-quarter revenue to be between $19.8B and $20.6B with gross margins between 57.5% and 59.5%. Analysts were expecting the company to generate $18.48B in revenue during the quarter.

“Our second quarter business was supported by HPC, IoT and Automotive-related demand,” said Wendell Huang, VP and Chief Financial Officer of TSMC, in a statement. “Moving into third quarter 2022, we expect our business to be supported by continued demand for our industry-leading 5nm and 7nm technologies.”

According to Reuters , Taiwan Semiconductor ( TSM ) also pointed out that demand was cooling from some of its clients, as consumer electronics customers look to reduce inventory.

"After two years of pandemic-driven stay-home demand, this type of adjustment is reasonable in our view," TSMC's Chief Executive Officer C. C. Wei said in an online earnings briefing, according to the news outlet.

Wei added that long-term demand for Taiwan Semiconductor's ( TSM ) was "firmly in place" and the company expects its "capacity to remain tight and our business to be more resilient."

In addition, Taiwan Semiconductor ( TSM ), which had previously guided spending to be between $40B and $44B, said capital expenditures would be at the lower end of the range, due to delays in delivery of some equipment.

The company also noted that inflation was an issue, following a report in May that it would start to raise prices next year.

Earlier this month, the Taiwanese Economy Minister said order books in the country's semiconductor industry, which includes Taiwan Semiconductor ( TSM ), were very full .

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