8 Major Takeaways from TSMC 4th Quarter Investor Conference

While Intel's 18A process may be comparable to TSMC's N3P, TSMC is already in its third year of high-volume production at N3 by the time Intel's 18A becomes available which will be exclusive to its products, potentially delaying availability to other clients.

Introduction:

Recently, TSMC, the world’s leading semiconductor manufacturer, held its highly anticipated 4th quarter investor conference, unveiling a wealth of information regarding the company’s trajectory and prospects for the year ahead.

From advancements in AI technology to cutting-edge packaging solutions and the rollout of innovative semiconductor processes, here’s a comprehensive breakdown of the key highlights from the conference.

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8 Major Takeaways from TSMC 4th Quarter Investor Conference

1. AI Takes Center Stage

CEO of TSMC, in his address, revealed that through 2027, a significant portion of revenue, estimated to be in the “high teens” percent, will stem from a specific AI application processor. This revelation underscores TSMC’s strong foothold in the burgeoning field of artificial intelligence, with an impressive yearly growth rate (CAGR) of approximately 50%.

The CEO expressed confidence in TSMC’s ability to capitalize on future opportunities within the AI landscape, citing increased customer demand and momentum in this domain.

Read More: TSMC Reports Better-than-Expected Profit and Revenue in 4th Quarter

2. Expanding AI-Related Offerings

Beyond AI application processors, TSMC is poised to tap into a broader spectrum of AI-related chips, networking solutions, and silicon for various applications, including PCs and smartphones. The CEO highlighted the substantial growth potential in this sector, attributing it to proactive capacity preparations driven by customer demand. This proactive approach positions TSMC to capitalize on the expanding AI market and drive further growth.

Read More: TSMC Continues to beat Intel & Samsung to Dominate Chip Revenue

3. Advanced Packaging Solutions

TSMC’s advanced packaging solutions, particularly its CoWoS (Chip-on-Wafer-on-Substrate) technology, were also a focal point of discussion. The company is set to double its CoWoS output in the coming year, although meeting demand remains a challenge until 2025. However, TSMC is diligently working to bolster its packaging capacity to address the growing market needs.

4. Next-Generation CoWoS

Anticipating sustained growth in advanced packaging, TSMC is gearing up for the next generation of CoWoS technology. With a projected CAGR of over 50% in the coming years, TSMC is already preparing for increased demand by enhancing its CoWoS offerings and ramping up production capacity.

5. N3 Process and Beyond

TSMC’s 3-nanometer (N3) process, which commenced mass production in the second half of 2023, is set to experience significant revenue growth in 2024. The CEO indicated that N3 revenue will more than triple, accounting for a substantial portion of TSMC’s total wafer revenue.

Moreover, TSMC’s N3 technology has garnered widespread interest, with major players in the smartphone and high-performance computing (HPC) sectors collaborating with the company. Additionally, TSMC’s introduction of the N3E variant, boasting enhanced performance and power efficiency, further solidifies its position as a leader in advanced semiconductor processes.

Read More: TSMC N3P To Outperform Intel 18A, Derailing Intel’s Foundry Leadership Plan by 2025

6. TSMC vs. Intel

A comparison between TSMC and Intel highlighted TSMC’s competitive edge in semiconductor manufacturing. While Intel’s 18A process may be comparable to TSMC’s N3P, TSMC is already in its third year of high-volume production at N3 by the time Intel’s 18A becomes available. Furthermore, Intel’s process will initially be exclusive to its products, potentially delaying availability to other clients.

Read More: Intel Outsources Latest CPU Production to TSMC; First time in History

7. Capital Expenditure and Revenue Growth

In terms of capital expenditure (capex), TSMC’s investments remain robust, with a focus on expanding capacity for 3nm and 2nm processes. Despite a slight decrease from 2023, TSMC’s capex for 2024 is substantial, reflecting its commitment to future growth.

The CEO expressed optimism regarding TSMC’s revenue outlook for 2024, anticipating healthy growth driven by the continued ramp-up of N3, strong demand for N5, and robust AI-related revenue streams. Additionally, TSMC expects its revenue to increase quarter-over-quarter throughout the year.

Read More: TSMC: 4 Trends Shaping Future of Chipmaking in the Next Decade

8. Long-Term Outlook and Dividend Increase

Reaffirming its long-term goals, TSMC aims to achieve a gross margin of 53% and higher while maintaining steady revenue growth between 15% and 20% CAGR over the next several years. Moreover, TSMC announced a dividend increase, reflecting its commitment to shareholder value and financial stability. The company plans to shift its cash dividend policy towards a steadily increasing payout per share in the coming years.

Conclusion:

TSMC 4th quarter investor conference provided valuable insights into the company’s strategic direction and growth prospects for 2024 and beyond. With a strong focus on AI, advanced packaging solutions, and cutting-edge semiconductor processes, TSMC is well-positioned to maintain its leadership in the semiconductor industry and drive continued success in the years ahead.

Editorial Team
Editorial Team
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