Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

It's happened.

Despite outlasting the rest of the tech industry amid troubles at client Apple Inc. and compatriot Foxconn Technology Group, Taiwan Semiconductor Manufacturing Corp. has come forward to share the disappointment.

Revenue this quarter will be as much as 2 percent less than analysts had estimated, the chipmaker to the stars announced on Thursday. If that doesn't seem like much, bear in mind that this is a company with the best investor relations team in the business and ergo is very good at managing expectations. Put simply, they (almost) never miss.

TSMC regularly posts net income that beats estimates.
Source: Bloomberg

The company certainly didn't fall short with last quarter's numbers, beating the street by more than 4 percent. But again, TSMC manages expectations well and so that upside surprise wasn't as fantastic as it may seem. To be clear, the chipmaker posted revenue declines earlier in the year, but this is a case where its own outlook undershot what analysts had hoped.

On the positive side, margins at both the gross and operating levels in the current three months will be higher than predicted because of strong demand for 28-nanometer manufacturing technology, one of the company's older products.

At the same time, Chairman Morris Chang told investors that TSMC's newest product-- 10-nanometer -- will drag down profitability in the second half of the year, offsetting those gains.

TSMC is set for its slowest revenue growth since 2011
Source: Bloomberg, TSMC
Note: 2017 estimate assumes no change in USD-TWD exchange rate.

While revenue this quarter will be less than estimated, and full-year sales will slow, TSMC looks committed to keeping a high pace of spending. I've already warned about the risks of this strategy. 

The company forecast revenue growth of just 5 percent to 10 percent this year in U.S. dollar terms. That's the slowest in six years, assuming no change in the Taiwan dollar exchange rate, while depreciation expenses are predicted to climb by a "high teen percent." Given that depreciation is the largest cost, such a divergence is something investors will want to watch closely.

As global tech investors prepare for the next earnings seasons, the lesson from Taiwan is that not even the mighty are immune.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at

To contact the editor responsible for this story:
Matthew Brooker at