TSMC's Q1 2023 Revenue Increases YoY, but QoQ Sales Decline; Q2 2023 Predictions Lower, Concerns Over Customer Inventory Adjustments Remain.

Taiwan Semiconductor Manufacturing Company (TSMC) announced its financial results for the first quarter of 2023, ending on March 31. TSMC reported revenue of NT$508.63bn ($18.30bn), up by 3.6% YoY due to increased demand. However, compared to the previous quarter, there was an 18.7% decrease in sales. TSMC's net profit was NT$206.99bn ($7.44bn), a decrease of 2.2% YoY and 30% QoQ.

The company's senior vice president and chief financial officer, Wendell Huang, acknowledged that macroeconomic conditions and sluggish demand from customers adversely affected their Q1 2023 business. Huang further expressed concerns that customer inventory adjustments would continue to impact their business in Q2 2023.

Regarding chip production, TSMC's 5nm chips accounted for 31% of wafer sales, 7nm chips accounted for 20%, while 7nm and more advanced technologies made up 51% of total wafer sales. These updates help provide insights to electronic component distributors about expected supply and demand changes in the market.

For the second quarter of 2023, TSMC's management predicts revenue to be between $15.2bn and $16bn, with gross margins between 52% to 54% and operating margins ranging from 39.5% to 41.5%. As an electronic components distributor, understanding TSMC's financial performance can guide decisions on pricing and inventory management. It is crucial to follow future developments since they could potentially affect supply chain operations and prices.