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Taiwan Semiconductor Manufacturing (TSM) beat analyst estimates for the first quarter, the company announced today. Net profit almost doubled to $3.9 billion on $10.31 billion in revenue. That amounts to a 91% increase from the March quarter of 2019. Analysts had projected net profit of $3.51 for the quarter. First quarter 2020 profit was just 0.8% higher than in the fourth quarter of 2019 and revenue fell 2.1% quarter to quarter.

Earnings of 75 cents a share beat Wall Street projections by 7 cents a share. The revenue beat was $120 million.

But the company trimmed its guidance for the rest of the year. For the quarter that ends in June, revenue growth will be flattish with revenue falling into a range between $10.1 billion and $10.4 billion. That’s actually good news since Wall Street has expecting revenue of just $9.91 billion.

For the full year revenue will grow at a percentage rate in the mid- to high-teens. That’s down from a forecast of more than 17% growth. After a solid first quarter and a projected flat second quarter, the math suggests that the company sees slower growth in the second half versus the first half of the year.  And the company did indeed hoist a warning flag on consumer demand in the second half. (Which does raise the question of whether or not Taiwan Semiconductor knows something about iPhone demand or product timing for Apple (AAPL) in the fall.

The chip sector has been buoyed today by the news that the company will stick with capital spending plans of $15 billion to $16 billion in 2020. That would be up from last year’s $14.9 billion.

I think the reaction today from investors and traders is “If they’re sticking with capital spending at that level, how bad can things be for chip companies?”

Today as of 3:30 p.m. New York time, Intel (INTC) was up 2.39% and Advanced Micro Devices (AMD) was ahead 2.91%. Cirrus Logic (CRUS) had gained 2.13% and Nvidia (NVDA) was higher by 4.03%.

Apple itself was up a tick or two at 0.08%.

Taiwan Semiconductor shares had gained 5.77% in today’s session. The stock has been a member of my long-term 50 Stocks Portfolio since October 7, 2019. The shares are up 9.45% since then.