TSMC’s revenue comes in at high end of predictions

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast.Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to a TSMC statement.Annual revenue slightly surpassed an estimate of NT$3.78 trillion made by Goldman Sachs Research on Sunday, but largely matched KGI Securities Investment Advisory Co’s (凱基投顧) expectations of NT$3.81 trillion. The chipmaker in October last year said that revenue growth would be supported by faster-than-expected demand for AI accelerators, which would grow at rates greater than 45 percent for the 2024 to 2029 period that it estimated in July. That would fuel demand for its leading-edge technologies such as 3-nanometer technology, it said“Everything related [to AI], like front-end and back-end capacity, is very tight,” TSMC chairman and CEO C.C. Wei (魏哲家) told investors, adding that the company is working hard to increase capacity to catch up with customers’ demand.To cope with strong AI chip demand, TSMC plans to speed up its 2-nanometer chip production in Taiwan and to quicken its chip manufacturing technology upgrade at its fabs in Arizona, it said. The chipmaker planned to produce 3-nanometer or even more advanced chips such as 2-nanometer chips from its second fab in Arizona.TSMC is scheduled to release detailed financial figures of last quarter and last year as well as to give its business outlook for this year during a quarterly conference scheduled for Thursday next week.KGI expected the chipmaker to make NT$475.89 billion net profit last quarter, higher than the consensus of NT$454.67 billion, according to a KGI report released on Monday. That represents quarterly growth of 5.22 percent from NT$452.3 billion based on KGI’s forecast, rather than a flat quarter as most analysts expected.Gross margin was expected to reach 61.5 percent in the fourth quarter of last year, exceeding TSMC’s guidance of between 59 percent and 61 percent, the KGI report said.For all of last year, TSMC is expected to report another record-breaking net profit of NT$1.69 trillion or NT$1.68 trillion as projected by KGI and Goldman Sachs Research, soaring about 44 percent from NT$1.17 trillion reported for 2024.Earnings per share would rise NT$64.7 to NT$65.1, up from NT$45.25 in 2024.