Taiwan Semiconductor Manufacturing Company (TSMC) exceeded revenue and profit expectations for the second quarter of the year. The company reported a revenue of 673.51 billion New Taiwan dollars (approximately $20.82 billion), surpassing the NT$657.58 billion expected by LSEG consensus estimates. Additionally, TSMC’s net income stood at NT$247.85 billion, outperforming the NT$238.8 billion LSEG SmartEstimate. This exceptional performance was driven by the growing demand for advanced chips, particularly those used in AI applications.
TSMC attributed its strong second-quarter results to the robust demand for its industry-leading 3-nanometer and 5-nanometer technologies. Despite facing challenges such as smartphone seasonality, the company experienced a significant increase in net revenue and net income compared to the same period last year. The surge in demand for AI applications has put pressure on chip supplies, making TSMC’s role as a key producer of advanced chips even more crucial.
While TSMC enjoys a dominant position in the market, it faces competition from rivals such as Samsung and Intel. Chairman and CEO C.C. Wei noted that meeting the high demand for chips has been a challenging task. The supply continues to be tight, and TSMC anticipates this trend to persist until 2025. However, the company is working on developing even more advanced technologies, such as 2-nanometer chips, with plans for mass production in 2025. These efforts aim to enhance the power and efficiency of the chips produced by TSMC.
Looking ahead, TSMC expects strong support from smartphone and AI-related demand in the third quarter. The company foresees 2024 as a year of significant growth, with projections of third-quarter revenue ranging between $22.4 billion and $23.2 billion. Furthermore, TSMC has narrowed its capital budget range for the year and is focusing 70% to 80% of its resources on advanced technologies. The company remains committed to meeting the increasing demand for its products, and it is considering converting more N5 technology into N3 to address the demand for 3-nanometer chips.
Despite its strong performance, TSMC’s shares closed lower on the day of the earnings announcement, reflecting a broader decline in Asian chip stocks. Analysts remain optimistic about TSMC’s future prospects, with expectations of revenue growth target revisions and price target increases. The company continues to dominate the global foundry market, holding 62% market share in the first quarter of the year.
TSMC’s second-quarter results showcase its resilience and ability to navigate challenges while capitalizing on growth opportunities. The company’s focus on innovation and meeting market demand positions it for continued success in the semiconductor industry.