Taiwan Semiconductor Jen-Chau Huan CFO Says After Last Year's 17% Electricity Price Increase, Electricity Price In Taiwan Has Increased By Another 25% Starting April 1 This Year, Expected To Take Out 70-80 Basis Points From Our Q2 Gross Margin. Looking Ahead To 2H Of The Year, We Expect The Impact From Higher Electricity Cost To Continue And Dilute Our Gross Margin By 60-70 Basis Points
Portfolio Pulse from Benzinga Newsdesk
Taiwan Semiconductor's CFO, Jen-Chau Huan, announced in a conference call that after a 17% increase in electricity prices last year, Taiwan has seen another 25% increase starting April 1 this year. This rise is expected to reduce the company's Q2 gross margin by 70-80 basis points. Furthermore, the CFO anticipates the higher electricity costs will continue to affect the gross margin by 60-70 basis points in the second half of the year.
April 18, 2024 | 3:23 pm
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Taiwan Semiconductor Manufacturing Company (TSM) faces a reduction in Q2 gross margin by 70-80 basis points due to a 25% increase in electricity prices in Taiwan, with an ongoing impact of 60-70 basis points expected in the second half of the year.
The significant increase in electricity prices directly affects TSM's operational costs, leading to a decrease in gross margin. As electricity is a substantial part of manufacturing expenses for semiconductor companies, any increase in these costs is likely to have a direct negative impact on profitability. The CFO's announcement confirms the expected financial impact, making it highly relevant and important for investors.
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