TSMC's Q1 2024 earnings thanks to strong demand for AI chips

  • Net revenue: NT$592.64 billion (US$18.87 billion), versus NT$582.94 billion expected
  • net income: 225.49 billion New Taiwan dollars, compared to 213.59 billion New Taiwan dollars expected

TSMC reported net revenues rose 16.5% from a year ago to NT$592.64 billion, while net income increased 8.9% from a year ago to NT$225.49 billion. a company Targeted first quarter revenue To range between $18 billion and $18.8 billion.

TSMC is the world's largest producer of advanced processors and counts companies such as Nvidia and Apple among its customers.

“TSMC is well positioned to perform strongly based on key industry trends. Continued demand for advanced chips, especially those used in AI applications, is a positive sign in the short and long term. The focus on developing advanced chips, such as “The shift towards 3nm technology is another factor driving TSMC's long-term growth,” the assistant at Counterpoint Research said on Monday before the results were announced.

TSMC currently produces 3nm chips and plans to begin mass production of 2nm chips in 2025. Smaller nanometer size typically results in more powerful and efficient chips.

Strong demand for AI chips, led by the spread of large language models such as ChatGPT and Chinese clones, has sent TSMC shares up 56% in the past year.

TSMC accounts for 61% of global foundry revenues In the fourth quarter, according to Counterpoint Research data. Samsung Foundry came in second with 14% of the market.

“TSMC's net profit margin remains one of the highest in the company's history at 40%, versus the industry average of 14%, demonstrating TSMC's strong competitive position. The high margin is a result of increased sales share of 7nm and smaller. , a market analyst at Konotoxia, said last week: “Chips with much higher margins.”

It was also recently awarded to the United States Initial approval for TSMC of Arizona To obtain up to $6.6 billion in government funding to build the world's most advanced semiconductors. TSMC is also eligible for about $5 billion in proposed loans.

Earlier this month, an earthquake struck Taiwan, the strongest in 25 years. A TSMC spokesman said its construction sites were normal Upon initial inspection, though, workers were briefly evacuated from some factories. These workers then returned to their workplaces.

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