Semiconductor Decline in 2023. Analyst Forecasts

What does the situation in the semiconductor market tell us?

Since the beginning of the year, the shares of ASML Holding N.V. (ASML) and Taiwan Semiconductor Manufacturing Company Limited (TSM) were down over 47%.

What are the results? Dutch semiconductor equipment maker ASML’s Q3 net income fell to €1.71 billion to €1.70 (Y/Y). The consensus forecast was €1.51bn. Gross margin was 51.8% versus the company’s forecast of 49-50%.

TSMC’s revenue jumped 47.9% YoY to $19.2 billion over the same period. Net income rose 79.7% YoY to a record $8.8 billion. The company also reported the threat of a decrease in demand against the backdrop of a reduction in consumer activity.

Why are stocks under pressure? According to Susquehanna Financial Group, the average waiting time for chip shipments has dropped to 26.3 weeks from almost 27 weeks in August. In some segments of the market, there is an excess of semiconductor products at all.

What’s next? Analysts at Goldman Sachs expect lower sales from companies such as Advanced Micro Devices Inc (AMD) and Intel Corporation (INTC).

Thus, it seems that even in a relatively stable semiconductor market for the technology sector, turbulent times may come. But this, of course, should be treated only as an opportunity.