Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has exceeded profit and revenue expectations in the fourth quarter, showcasing resilience amid challenging macroeconomic conditions.
Key Q4 Results Compared to LSEG Consensus Estimates:
- Revenue: NT$625.53 billion ($19.62 billion), surpassing the expected NT$618.31 billion
- Net income: NT$238.71 billion, beating the expected NT$225.22 billion
TSMC reported a 1.5% dip in revenue from the previous year to NT$625.53 billion, with net income declining by 19.3% to NT$238.71 billion. These results, however, outperformed TSMC’s guidance for Q4 revenue, ranging between $18.8 billion and $19.6 billion.
TSMC attributed the 14.4% sequential revenue increase in Q4 to the strong ramp-up of its industry-leading 3-nanometer technology. Apple and Nvidia, among TSMC’s major clients, benefit from the cutting-edge processors produced by the chipmaker, particularly in Apple’s iPhones.
CEO C.C. Wei acknowledged the challenges faced by the global semiconductor industry in 2023 due to macroeconomic conditions and an inventory adjustment cycle. Despite these challenges, TSMC remains optimistic about capturing growth opportunities in high-performance computing and generative AI applications in 2024.
Wei stated, “We expect 2024 to be a healthy growth year for TSMC, supported by continuous strong ramp-up of our industry-leading three nanometer technologies, strong demand for the five nanometer technologies and robust AI-related demand.”
While TSMC anticipates first-quarter revenue between $18 billion and $18.8 billion this year, Wei highlighted persisting macroeconomic headwinds that could impact consumer sentiment and market demand.
Analysts, including Brady Wang from Counterpoint Research, emphasize TSMC’s pivotal role in AI semiconductors, especially with the strong ramp-up in N3 (3-nanometer) and the upcoming AI applications surge in 2024. TSMC’s dominance is solidified by its ability to provide sophisticated 5-nanometer and 3-nanometer technologies for AI-enhanced computing devices.
As TSMC continues to manufacture 3-nanometer chips, plans for 2-nanometer mass production by 2025 are underway, showcasing the company’s commitment to innovation and maintaining its position as a leader in the semiconductor industry. Stay tuned for updates on TSMC’s continued advancements and contributions to cutting-edge technology.
