Managing Director, Zero One, Zero One

Vincent Fernando, CFA

20 years of experience researching capital markets in Asia and the USA.

Managing Director, Zero One

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Equity Bottom-Up

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>3Q22E earnings came in mostly ahead of expectations, however, if one looks at margin and inventory performance, the latest earnings season doesn't look so good.</li>
<li>Semiconductor margins fell and inventory days rose multi-year highs, Hardware margins fell further and inventory days look worse than ever.</li>
<li>Conclusion: 4Q22E end-demand could disappoint significantly and then companies will be slashing prices/writing off inventory into 1Q23E.</li>
</ul>


3Q22E earnings came in mostly ahead of expectations, however, if one looks at margin and inventory performance, the latest earnings season doesn't look so good.
Semiconductor margins fell and inventory days rose multi-year highs, Hardware margins fell further and inventory days look worse than ever.
Conclusion: 4Q22E end-demand could disappoint significantly and then companies will be slashing prices/writing off inventory into 1Q23E.


Taiwan Tech 3Q22 Earnings Season Ex-Post: Signs of Major Margin Pain Ahead