TSMC's second-quarter earnings beat expectations, coming in at $2.30 vs. the consensus of $2.17. The company also beat on revenue, with NT $183.02 billion versus the NT $182.25 billion consensus.
However, investors were expecting a big quarter and now are selling on the news. The stock was trading at a 52-week high on strong expectations for Apple orders. All those Apple orders might be part of the problem. There is a concern that TSMC is so focused on Apple as a customer that other customers might look elsewhere for capacity and TSMC will lose its market dominance.
TSMC recently traded around $20.50, up 17.5% for the year to date. Rising Competition Several key competitors, including Samsung and Intel (INTC), have made significant changes to their foundry management and accelerated the pace of their technology offerings to capitalize on TSMC's constrained capacity. For better or for worse, since grabbing Apple as a client form Samsung, TSMC's order flow is becoming Apple-centric. Ultimately TSMC is expected to land 60% to 70% of Apple's total 14/16 nm chip orders over the next few years, with the remainder going to Samsung.
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