Taiwan Semiconductor (TSM 32.21, -0.08) is lower by 0.2% after reporting in-line earnings on light revenue and guiding second quarter revenue below market expectations.
The world's largest contract chipmaker reported in-line first quarter earnings of TWD3.38 per share on revenue of TWD233.91 billion, which increased 14.9% year-over-year, but was shy of expectations.
Gross margin improved to 51.9% from 44.9% one year ago.
Shipments of 16/20-nanometer technology made up 31.0% of total wafer revenue while 28-nanometer process technology accounted for 25.0% of total wafer revenue. 28-nanometer and more advanced technology made up 56.0% of total wafer revenue.
The company noted that the Taiwanese dollar has been one of the best performing currencies in Asia so far this year, which weighed on results. The company expects the Taiwanese dollar to appreciate 2.1% in the second quarter, which prompted cautious guidance.
For the second quarter, the company expects that revenue will be between TWD213 and TWD216 billion, which is shy of current market expectations. Gross margin is expected between 50.5% and 52.5%.
In addition to reporting its quarterly results, Taiwan Semiconductor said it will not bid for Toshiba's memory unit after failing to find a clear synergy.