Positive Margin Outlook Amid Diversification Risks

5 days ago

"Looking ahead, the company's forecasting fourth quarter revenue to be about $33 billion. That would be a 1% increase from the previous quarter or a 22% increase from the same quarter last year at the midpoint. They are also forecasting their gross profit margin to come in at 60% which is much better than I was expecting. Taiwan Semiconductor, as I mentioned, is diversifying its manufacturing base outside of Taiwan, expanding into the United States, into Japan, into Europe, and production in those regions is much more costly than production in its home country in Taiwan. But so far the margins have not declined by what the company was expecting. So far, the results have been better than expected on the cost front for these facilities."

The speaker highlights TSMC's optimistic outlook with a forecasted Q4 revenue of approximately $33 billion and a strong gross profit margin of 60%, contrary to expectations of a decline due to costlier global diversification. This commentary emphasizes that early results have shown less margin erosion than anticipated, reducing downside risks.