Introduction
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor manufacturer, has reported remarkable financial results for the third quarter of 2024. TSMC announced a significant revenue increase of 39% year-over-year and a 54% rise in net income reports.
This performance highlights TSMC’s strong position in the semiconductor industry amidst growing global demand for advanced technologies.
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Summary
- TSMC reports a 39% revenue increase and a 54% rise in net income for Q3 2024.
- Consolidated revenue reached NT$759.69 billion (US$23.50 billion).
- Gross margin for the quarter was 57.8%, with an operating margin of 47.5%.
- Advanced technologies accounted for 69% of total wafer revenue.
- Q4 revenue is projected between US$26.1 billion and US$26.9 billion.
Financial Highlights
- Revenue: TSMC reports consolidated revenue of NT$759.69 billion for the third quarter.
- Net Income: The net income for the quarter was NT$325.26 billion.
- Earnings Per Share (EPS): The diluted EPS reached NT$12.54 (approximately US$1.94 per ADR unit).
- Growth Compared to Last Year: Revenue surged by 39% compared to Q3 2023.
- Quarterly Increase: Compared to the previous quarter, revenue rose by 12.8%, while net income increased by 31.2%.
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Year-Over-Year Performance
TSMC’s strong year-over-year performance reflects the robust demand for its semiconductor products.
The company has successfully capitalized on trends in artificial intelligence (AI), high-performance computing, and 5G technologies.
These sectors have driven the need for advanced chips, enabling TSMC to maintain its market leadership.
Strong Quarterly Results
In US dollar terms, TSMC’s third-quarter revenue was reported at US$23.50 billion, reflecting a 36% year-over-year increase and a 12.9% rise from the previous quarter.
This consistent growth underscores TSMC’s ability to adapt to changing market conditions and meet the increasing demand for semiconductor solutions.
Profit Margins
The company’s profit margins remain robust, with the following metrics reported for the quarter:
- Gross Margin: 57.8%
- Operating Margin: 47.5%
- Net Profit Margin: 42.8%
These figures indicate TSMC’s efficiency in managing costs while generating substantial revenue, further solidifying its financial stability.
Demand for Advanced Technologies
A significant portion of TSMC’s revenue comes from advanced process technologies. In the third quarter, shipments of 3-nanometer technology accounted for 20% of total wafer revenue, while 5-nanometer shipments made up 32%.
Additionally, 17% of revenue was derived from 7-nanometer technologies. Overall, advanced technologies (7nm and above) constituted 69% of total wafer revenue, demonstrating TSMC’s strong position in cutting-edge semiconductor manufacturing.
Insights from TSMC Leadership
Wendell Huang, Senior Vice President and Chief Financial Officer of TSMC, commented on the company’s performance:
“Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies.”
He further emphasized that TSMC expects strong demand to continue into the fourth quarter of 2024.
Fourth Quarter Expectations
Looking ahead, TSMC management has provided guidance for the fourth quarter of 2024. The company anticipates revenue between US$26.1 billion and US$26.9 billion, driven by ongoing demand for advanced semiconductor solutions.
Based on an exchange rate assumption of 1 US dollar to 32.0 NT dollars, TSMC expects:
- Gross Profit Margin: Between 57.0% and 59.0%
- Operating Profit Margin: Between 46.5% and 48.5%
Competitive Landscape
TSMC faces competition from various global players in the semiconductor industry. However, its commitment to innovation and investment in research and development allows it to maintain a competitive edge.
As the market evolves, TSMC’s ability to deliver advanced manufacturing technologies will be critical in meeting customer needs.
Conclusion
TSMC’s third-quarter results demonstrate its strong financial performance and market leadership in the semiconductor industry.
The company’s significant year-over-year growth in revenue and net income reflects the ongoing demand for advanced semiconductor solutions, particularly in AI and high-performance computing.
As TSMC looks ahead to the fourth quarter and beyond, its strategic investments in advanced technologies and commitment to innovation will play a vital role in sustaining its growth trajectory.
With a robust outlook and strong demand forecasts, TSMC is well-positioned to continue leading the semiconductor market.
