TSMC Shares Gain On Q3 Earnings, Robust Q4 Outlook Based On 5-nm Demand

Taiwan Semiconductor Manufacturing Co Ltd TSM reported third-quarter FY21 revenue growth of 16.3% Y/Y to $14.88 billion (NT$414.67 billion), beating the consensus of $14.83 billion.
The costs rose 21.7% Y/Y to $7.2 billion, while the cost margin expanded 210 bps to 48.7%.
Margins: The gross margin contracted 210 bps to 51.3%.
The operating margin contracted 90 bps to 41.2%.
EPS was $1.08 per ADR (NT$6.03), beating the consensus of $1.04.
TSMC held $35 billion in cash and equivalents and generated NT$318.71 billion in operating cash flow.
"Our third-quarter business was mainly supported by strong demand across all four growth platforms, which are smartphone, HPC, IoT, and Automotive-related applications," said CFO Wendell Huang. "Moving into fourth quarter 2021, we expect our business to be supported by strong demand for our industry-leading 5nm technology."
Outlook: TSMC sees Q4 revenue of $15.4 billion - $15.7 billion.
TSMC sees gross margin of 51% - 53%, and operating margin of 39% - 41%.
Price Action: TSM shares traded higher by 3.25% at $113.55 in the premarket session on the last check Thursday.

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