Taiwan Semiconductor Manufacturing Company (TSMC) has once again exceeded revenue and profit expectations in the second quarter. With revenue of 673.51 billion New Taiwan dollars ($20.82 billion) and net income of NT$247.85 billion, TSMC has shown impressive growth compared to LSEG consensus estimates. The company’s net revenue rose by 40.1% from the previous year, showcasing its dominance in the market for advanced chips used in AI applications.
Chairman and CEO C.C. Wei attributed the success of the second quarter to the strong demand for TSMC’s industry-leading 3-nanometer and 5-nanometer technologies. However, this surge in demand was partially offset by the seasonal fluctuations in smartphone sales. The explosive growth in the AI industry has led to a strain on chip supplies, with TSMC being the main producer of advanced chips for various applications, including smartphones and AI technologies.
Looking ahead, TSMC is poised for further growth, especially with its plans to commence mass production of 2-nanometer chips in 2025. The company projects a strong third-quarter revenue between $22.4 billion and $23.2 billion, supported by continued demand for smartphones and AI-related products. With the expectation of 2024 being a “strong growth year” for TSMC, the company is focused on meeting the escalating demand for its advanced technologies.
To support its growth and innovation, TSMC is narrowing its capital budget range to between $30 billion and $32 billion, with a significant portion dedicated to advanced technologies. The company is working tirelessly to increase its production capacity to meet customer demand, even considering converting more of its current technology to meet the demand for 3-nanometer chips. This commitment to innovation and expansion reflects TSMC’s position as a market leader in the semiconductor industry.
Despite the positive second-quarter results, TSMC shares closed 2.43% lower on Thursday amidst a broader sell-off in Asian chip stocks. However, the surging demand for advanced chips used in AI applications has still led to a nearly 70% increase in TSMC’s Taiwan-listed shares this year. Analysts remain optimistic about TSMC’s future growth, with expectations of raising the revenue growth outlook for 2024 and maintaining strong market share in the global foundry market.
Taiwan Semiconductor Manufacturing Company continues to demonstrate its leadership in the semiconductor industry through strong financial performance, innovative technologies, and a commitment to meeting market demand. As the demand for advanced chips in AI applications continues to grow, TSMC is well-positioned to capitalize on this trend and drive further growth in the years to come.
Leave a Reply