TSMC Posts $18.87B Revenue in Q1, Up 16.5%

Key Points

• TSMC  achieved NT$592.64 billion, a 16.5% year-over-year increase, surpassing expectations.
• Reported NT$225.49 billion, up 8.9% from last year, beating forecasts.
• Announced significant US investment with up to $6.6 billion in funding for new facilities.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor foundry, reported robust financial results for the first quarter on Thursday. The company announced a net revenue of NT$592.64 billion ($18.87 billion), surpassing the expected NT$582.94 billion and marking a 16.5% increase year over year. Net income also exceeded forecasts, reaching NT$225.49 billion against the anticipated NT$213.59 billion, reflecting an 8.9% growth from the previous year. These figures highlight TSMC’s continued dominance in the semiconductor industry, buoyed by strong demand for advanced chip technologies.

TSMU 2024 Forecast: Revenue to Hit $20.4B in Q2

Looking forward, TSMC’s leadership is optimistic about 2024. The CEO announced expectations of “a healthy growth year” driven by technological leadership and an expanding customer base. Particularly, revenue from server AI processors is projected to more than double, underscoring the company’s pivotal role in AI advancements. Meanwhile, the CFO anticipates second-quarter revenue to be between $19.6 billion and $20.4 billion, bolstered by strong demand for 3-nanometer and 5-nanometer chips, though slightly offset by seasonal declines in the smartphone sector.

Earthquake Test Passed; Full Recovery in Q2

Earlier this month, TSMC demonstrated remarkable resilience following Taiwan’s strongest earthquake in 25 years. The company reported no significant damage to its facilities or critical equipment, including EUV machines. Although some wafers were affected and scrapped, TSMC expects to recover most of the lost production in Q2, minimising revenue impact. This event underscores TSMC’s robust disaster preparedness and operational excellence.

US Funds TSMC with $6.6B for Chip Plants

In addition to technological advancements, TSMC is set to expand its global footprint. The US government has preliminarily approved up to $6.6 billion in advanced semiconductor facility construction funding. This move by TSMC to localise cutting-edge chip production is a key part of a broader global strategic shift. The company remains eligible for an additional $5 billion in proposed loans, further solidifying its financial base and expansion plans.

TSMC Leads with 61% Market Share, 40% Margin

TSMC continues to lead the global foundry market, commanding a 61% revenue share, far outpacing its closest competitor, Samsung Foundry, which holds just 14%. With a net profit margin of 40%—nearly triple the industry average—TSMC’s focus on 7nm and smaller chips yields significantly higher margins, positioning it well above its peers. Industry analysts praise TSMC for its emphasis on producing advanced, high-margin chips. This strategy will fuel long-term growth, particularly as the demand for AI and other high-tech applications surges.