Hey Global Investor, here's what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Thursday Close) 3,483.34 −5.33 (0.15%)

NASDAQ (Thursday Close) 11,713.87 −54.86 (0.47%)

FTSE 100 (5 PM IST) 5905.62 +73.1 (1.2%)

NIFTY 50 (Today's Close) 11,762.45 +82.10 (0.70%)

USDINR (5 PM IST) 73.33 (1 Year +2.9%)

Taiwan Semiconductor Tops Q3 Earnings Target On 5G Lift

Taiwan Semiconductor Manufacturing Company beat Wall Street expectations for Q3 and offered in-line guidance.

Background: TSMC controls over half of the world’s market for made-to-order chips and is a bellwether for global electronics demand. The company is leading the race to make ever-smaller chips. Smaller circuits translate to faster, more power-efficient processors. Its clients include Apple, Nvidia, Advanced Micro Devices, and more.

What Happened? TSMC reported better-than-expected Q3 results. Its business benefitted from the strong demand for chips used in 5G smartphones, high-performance computing (HPC), and the Internet of Things (IoT).

Key Numbers:

• Revenue: $12.1B vs. $11.5B expected, up 29% from year before

• Profit: 90 cents per American depository share vs. 77 cents expected.

• Quarterly revenue was up 29.2% on a Y-o-Y basis.

TSM Q4 revenue guidance is around $12.55B, well above the Wall Street consensus of $11.7B. Expected gross margin is 52.5% with an operating margin of 41.5%. In Q4, the company expects strong demand for its 5-nanometer chips, in line with increasing HPC applications and 5G smartphone launches. The 5-nanometer chips accounted for 8% of total Q3 revenue, while 7-nanometer and 16-nanometer accounted for 35% and 18%, respectively. 

TSMC’s chip exports received a boost in August and September as Huawei bulk-ordered chips ahead of US sanctions that hit mid-September. Similarly, other customers increased their orders in the face of disruption to global manufacturing networks due to the pandemic. The company expects the chip industry's inventory levels to remain high for the year.

Market reaction: Despite posting strong Q3 results, TSMC’s stock dropped 0.51% to close at $88.15.

Company Snapshot 📈

TSM $88.15 -0.45 (-0.51%)

Analyst Rating (30 Ratings) BUY 86%  HOLD 7%  SELL 7%

Newsworthy 📰

• No Reverse: U.S. judge 'not inclined' to reverse decision on WeChat app store ban 

• Chinese Whispers: Nvidia’s $40 billion Arm acquisition could be targeted by Chinese regulators, analysts say (NVDA -0.89%)

• Cutting it Down: Elon Musk cuts Tesla Model S price twice in one week (TSLA -2.69%)

Later Today 🕒

• 6.00 PM IST: Retail sales

• 6.00 PM IST: Retail sales ex-autos

• Before Market Open: Badger Meter Inc (BMI) Earnings

• Before Market Open: J B Hunt Transport Services Inc (JBHT) Earnings

• Before Market Open: Bank of New York Mellon Corp (BK) Earnings

Fun Fact of The Day 🌞

The start-up sound for Window 95 was made on an Apple Macintosh computer.

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