All eyes are on TSMC earnings as the chipmaker industry faces slowdown worries

Visitors taking photofs at a TSMC booth at the 2024 World Semiconductor Congress in Nanjing, China.

This week’s sell-off in chip stocks and lingering questions about the demand for artificial intelligence tech has raised the stakes for Taiwan Semiconductor Manufacturing Company’s coming earnings report.

The chipmaker will report its full third-quarter earnings in the early hours on Thursday. The results will serve as a key update for investors eagerly watching for signs of an industry slowdown after downbeat guidance from ASML triggered a sell-off in top semiconductor shares on Tuesday.

TSMC, which is one of ASML’s largest customers and a top supplier to tech firms like Nvidia and Apple, revealed last week that it pulled in revenue of $759.69 billion New Taiwan dollars, or around $23.57 billion, in the third quarter, beating estimates.

TSMC edged 1% lower Wednesday afternoon, with shares trading around $187.82. The stock is up 84% year-to-date, thanks partly to the firm’s strong financial results so far in 2024.

Chip and semiconductor stocks, meanwhile, traded slightly higher, with the SPDR S&P Semiconductor ETF rising nearly 1% by mid-day.

Traders are waiting for guidance from TSMC executives on the firm’s earnings call regarding demand in the current quarter as well as the coming year.

Fears about demand were ignited recently when Nvidia reported results for the second quarter in August. The chip giant’s earnings beat estimates but fell short of the loftiest projections, leading to questions about cooling appetite for AI-enabling technology as firms have yet to report meaningful returns on huge capital expenditures in the space.

Since then, Nvidia has once again traded close to all-time highs. Recent comments from CEO Jensen Huang point to extremely high demand for the next-generation Blackwell chip, which Huang has said will be sold out for the next 12 months.