A logo of Taiwan Semiconductor Manufacturing Company (TSMC) is seen during the opening ceremony of the TSMC Global RnD Center on July 28, 2023 in Hsinchu. (Photo by Amber Wang / AFP)
Amber Wang | Afp | Getty Images
Taiwan Semiconductor Manufacturing Company on Thursday beat first-quarter sales and profit expectations thanks to continued strong demand for advanced chips, particularly those used in AI applications.
Here are TSMC’s first quarter results compared to LSEG’s consensus estimates:
- Net sales: 592.64 billion new Taiwan dollars (US$18.87 billion), versus expected NT$582.94 billion
- Net income: NT$225.49 billion, versus expected NT$213.59 billion
TSMC reported that net revenue rose 16.5% year-on-year to NT$592.64 billion, while net profit rose 8.9% year-on-year to NT$225.49 billion. The company forecast first-quarter revenue between $18 billion and $18.8 billion.
TSMC is the world’s largest manufacturer of advanced processors and counts companies such as Nvidia and Apple among its customers.
“For the second quarter of 2024, we expect our business to be supported by strong demand for industry-leading 3-nanometer and 5-nanometer technologies, partially offset by continued smartphone seasonality,” CFO Wendell Huang said during the company’s conference call on Thursday.
CEO CC Wei said TSMC expects 2024 to be a “healthy” year of growth, supported by “our technology leadership and broader customer base.”
“Almost all AI innovators are collaborating with TSMC to meet the insatiable AI-related demand for energy-efficient computing power,” Wei said, adding that the company expects the revenue contribution of server AI processors to “more than double in this year.” Year” estimates.
TSMC expects second-quarter revenue between $19.6 billion and $20.4 billion.
TSMC currently produces 3-nanometer chips and plans to begin mass production of 2-nanometer chips in 2025. Typically, smaller nanometer size results in more powerful and efficient chips.
Strong demand for AI chips, led by the proliferation of large language models such as ChatGPT and Chinese clones, has caused TSMC shares to rise 56% over the past year.
“TSMC is well positioned for strong performance based on key industry trends. Continued demand for advanced chips, particularly those used in AI applications, is a positive sign in both the short and long term. The focus on developing advanced chips, such as “The shift to 3nm technology is another factor driving TSMC’s long-term growth,” Brady Wang, deputy director at Counterpoint Research, said on Monday ahead of the release Results.
TSMC accounted for 61% of global foundry sales in the fourth quarter, according to data from Counterpoint Research. Samsung Foundry came in second with 14% market share.
“TSMC’s net profit margin remains one of the highest in company history at 40%, compared to an industry average of 14%, underscoring TSMC’s strong competitive position. The high margin is the result of an increased share of sales of 7 nm and smaller chips, which have significantly higher margins, said Grzegorz Drozdz, market analyst at Conotoxia, last week.
Last year, TSMC’s business was impacted by macroeconomic headwinds and inventory adjustments. Smartphone and PC makers stockpiled chips during the pandemic, creating excess inventory as demand waned in the coronavirus era.
Earlier this month, Taiwan was hit by an earthquake – the strongest in 25 years. A TSMC spokesman said construction sites were normal upon initial inspection, although workers were briefly evacuated from some factories. These workers then returned to work.
“There were no power outages, no structural damage to our factories and there was no damage to our critical tools, including all of our extreme ultraviolet lithography tools,” CFO Huang told investors and analysts on Thursday.
EUV machines are crucial in the production of the most advanced processors.
However, some wafers were affected and “had to be scrapped,” Huang said, adding that the company expects to recover most of the lost production in the second quarter, with “minimal impact” on sales.
“We just forecast a 1.1 percentage point decline in our second quarter gross margin to 52% at the midpoint, primarily due to the impact of the April 3 earthquake, as just discussed, and higher electricity costs in Taiwan,” Huang said.
The US also recently granted TSMC’s Arizona subsidiary preliminary approval for up to $6.6 billion in government funding to build the world’s most advanced semiconductors. TSMC is also eligible for approximately $5 billion in proposed borrowings.
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2024-04-19 02:32:08
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