TSMC Conference Call: Full-year revenue expected to grow by 30%, AI demand is real, capital expenditure likely to increase next year

On Thursday, the global chip manufacturing giant Taiwan Semiconductor (TSMC) announced better-than-expected third-quarter results, with a 54% year-on-year increase in net profit, net revenue exceeding market expectations, and a further increase in the proportion of revenue from advanced processes compared to the previous quarter. During the subsequent earnings conference call, TSMC revealed several key points, including an expected 30% increase in full-year revenue, capital expenditures slightly higher than $30 billion, the real demand for AI, and no intention to acquire Intel. TSMC Chairman Mark Liu stated during the conference call: In US dollars, it is expected that full-year revenue will increase by nearly 30%. CoWoS demand exceeds supply, and capacity for 2024 and 2025 will double. Capital expenditures in 2025 are likely to be higher than this year, with 2024 capital expenditures slightly above $30 billion, previously expected to be between $30 billion and $32 billion. Higher capital expenditures always bring higher growth opportunities, and growth in the next five years will also be "healthy." Regarding AI demand, Mark Liu expressed optimism about the outlook for chip demand: The demand for AI is real, overall chip demand is stabilizing and improving. Demand is just the beginning, with a key customer of the company stating that current demand is "crazy, just getting started," and will continue for several years. It is expected that in the 2024 fiscal year, revenue from server AI processors will grow more than threefold, accounting for 15% to 19% of total revenue. At the same time, the growth expectation for total revenue has been raised from the previous 20%-24% to 30%. Furthermore, addressing the rumors about TSMC acquiring Intel, Mark Liu responded: There is no intention to acquire Intel's wafer fabs, as he is not interested in acquiring Intel's wafer fabs. Additionally, TSMC stated that in 2025, the gradual ramp-up of overseas wafer fabs is expected to dilute the gross margin by 2-3%. Nevertheless, next year is still expected to be a healthy year of growth, with positive utilization rates