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Taiwan Semiconductor Returns To Growth With First-Quarter Beat finance.yahoo.com Taiwan Semiconductor Manufacturing ( TSM), the world's largest contract chipmaker, on Thursday beat expectations for the first quarter. But TSM stock fell in early trading. X The chip foundry, better known as TSMC, earned $1.38 per U.S. share on sales of $18.87 billion in the March quarter. Analysts polled by FactSet had expected earnings of $1.30 a share on sales of $18.31 billion. In the year-earlier period, TSMC earned $1.30 per U.S. share on sales of $16.62 billion. With its Q1 report, TSMC returned to sales and earnings growth after four consecutive quarters of declines on a year-over-year basis. Taiwan Semiconductor's sales rose 12.9% while earnings climbed 6.2%. For the current quarter, TSMC expects revenue of $19.6 billion to $20.4 billion. The midpoint of $20 billion topped Wall Street's target of $19.44 billion. In the second quarter last year, TSMC generated revenue of $15.47 billion. TSM Stock Drops After Report In premarket trading on the stock market today, TSM stock slid 2% to 136.21. TSMC's customers include Apple ( AAPL), AMD ( AMD), Nvidia ( NVDA), Qualcomm ( QCOM) and more. "Our business in the first quarter was impacted by smartphone seasonality, partially offset by continued HPC (high-performance computing)-related demand," Chief Financial Officer Wendell Huang said in a news release. He added, "Moving into second quarter 2024, we expect our business to be supported by strong demand for our industry-leading 3-nanometer and 5-nanometer technologies, partially offset by continued smartphone seasonality." Circuit widths on chips are measured in nanometers, which are one-billionth of a meter. TSM Stock Is Recent Breakout In the first quarter, shipments of 3-nanometer chips accounted for 9% of total wafer revenue, 5-nanometer accounted for 37%, and 7-nanometer accounted for 19%. Advanced technologies, defined as 7-nanometer and smaller nodes, accounted for 65% of total wafer revenue. TSMC lowered its industry growth expectations slightly but kept its company target, Barclays analyst Simon Coles said in a client note. The company reiterated its guidance for revenue growth in the low to mid 20% range, he said. "AI remains the bright spot" for Taiwan Semiconductor as the company sees a gradual recovery in most of its end markets this year, Coles said. He rates TSM stock as overweight with a price target of 145. On Jan. 18, TSM stock broke out of a cup-with-handle base at a buy point of 105.52, according to IBD MarketSurge charts. The breakout occurred after TSMC delivered a beat-and-raise report for the fourth quarter. Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.