KUALA LUMPUR, April 15 (Bernama) -- Bursa Malaysia erased early gains to end slightly lower on Wednesday, as profit-taking emerged in selected heavyweight counters mainly in financial services and utilities sectors. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 4.70 points, or 0.28 per cent, to 1,683.42 from Tuesday’s close of 1,688.12. The benchmark index opened 3.30 points higher at 1,691.42 and moved between 1,680.46 and 1,695.68 throughout the day. However, in the broader market, gainers outpaced losers 615 to 455, while 566 counters were unchanged, 1,057 untraded and 13 suspended. Turnover increased to 3.33 billion units worth RM3.02 billion from Tuesday’s 2.85 billion units worth RM2.67 billion.
Taiwan Semiconductor heads into its April 16 earnings with strong momentum, as booming AI demand continues to drive both revenue growth and pricing power, but investors are now focused on whether margins have peaked.
Revenue Surge Signals Strong AI Demand
TSMC has already reported Q1 revenue of US$35.7 billion, marking a 35% year-on-year increase and beating expectations.
The growth was driven by:
- High-performance computing (HPC), including AI, now contributing 58% of total revenue
- Price hikes of 5%–10% on advanced nodes
- A record 45.2% YoY growth in March revenue, the strongest monthly performance on record
This underscores TSMC’s position as a critical supplier in the global AI supply chain, where demand remains structurally strong.
Margins Hit Record Levels, but Risks Emerging
TSMC guided Q1 gross margins at 63%–65%, the highest in its history, supported by strong AI-driven demand and pricing power.
However, margin sustainability is the key debate:
- 2nm technology ramp could dilute margins by 2%–3%
- Overseas fab expansion may add another 2%–3% drag
- High depreciation costs from new facilities could pressure profitability
Analysts warn that Q1 may represent peak margins in the near term.
Key Metrics to Watch Post-Earnings
Investors will closely monitor three critical indicators:
- Q2 Revenue Guidance (US$37–38B expected)
- Above range → signals continued AI acceleration
- Below range → raises concerns on demand momentum
- Full-Year Growth Target (~30%)
- Maintained or upgraded → confirms strong AI cycle
- Lowered → potential negative catalyst
- Capex Outlook (US$52–56B range)
- Move toward upper bound → validates strong demand and supply constraints
Options Market Signals Cautious Optimism
Options positioning suggests a moderately bullish bias:
- Put/Call ratio at 1.19, indicating some hedging
- Call activity concentrated between US$377–420, reflecting upside bets
- Institutional positioning leans bullish, with strong in-the-money call exposure
Valuation Still Attractive Relative to Growth
TSMC trades at around 24x forward earnings, which remains reasonable given its growth profile, especially compared to broader markets like the S&P 500.
This leaves room for multiple expansion if earnings confirm continued AI-driven growth.
Investor Takeaways
- TSMC delivered strong revenue growth (+35% YoY), driven by AI and HPC demand.
- Margins are at record highs, but may face near-term pressure from 2nm expansion and capex.
- Key catalysts include Q2 guidance, full-year outlook, and capex plans.
- Options data shows cautious bullish positioning ahead of earnings.
- The earnings call is a critical validation point for the AI investment thesis.
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