TSMC beats profit and revenue expectations in the fourth quarter

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The world’s largest contract chipmaker Taiwan Semiconductor Manufacturing Company on Thursday posted better-than-expected profit and revenue on the again of weaker macroeconomic circumstances.

Here are TSMC’s fourth-quarter outcomes versus LSEG consensus estimates:

  • Revenue: 625.53 billion New Taiwan {dollars} ($19.62 billion), vs. NT$618.31 billion anticipated
  • Net revenue: NT$238.71 billion, vs. NT$225.22 billion anticipated

TSMC reported revenue slipped 1.5% from a 12 months in the past to NT$625.53 billion, whereas web revenue dropped 19.3% from a 12 months in the past to NT$238.71 billion. That compares with TSMC’s guidance for fourth-quarter revenue between $18.8 billion and $19.6 billion.

TSMC counts Apple and Nvidia amongst its largest shoppers. TSMC produces the most superior processors discovered in Apple’s iPhones.

“In the fourth quarter, revenue elevated 14.4% sequentially [from the third quarter], supported by the continued robust ramp of our industry-leading 3-nanometer know-how,” mentioned TSMC in its fourth-quarter earnings report.

Chipmakers equivalent to Samsung Electronics and SK Hynix have reported declines in quarterly earnings on account of a post-pandemic plunge in the demand for shopper electronics like smartphones and laptops. That resulted in smartphone and PC makers grappling with extra inventories of chips.

But analysts say chip inventories at smartphone and PC makers are operating down and count on restocking demand to select up.

In its third-quarter earnings report in October, TSMC mentioned that its enterprise was supported by the industry-leading 3-nanometer know-how and greater demand for 5-nanometer applied sciences, partially offset by prospects’ ongoing stock adjustment.

“TSMC’s robust ramp-up in N3 and AI purposes positions it as a serious beneficiary in AI semiconductors,” Brady Wang, affiliate director at Counterpoint Research, mentioned Tuesday. N3 refers to TSMC’s most superior node, which produces 3-nanometer chips.

“Nanometer” in chips refers to the dimension of particular person transistors on a chip. The smaller the dimension of the transistor, the extra of them will be packed onto a single semiconductor. As such, smaller nanometer sizes usually yield extra highly effective and environment friendly chips.

“The anticipated surge in AI-based PC purposes in 2024 underscores TSMC’s essential function, solidifying its dominance and finest positioning in offering subtle 5-nanometer and 3-nanometer applied sciences for AI-enhanced computing gadgets,” mentioned Wang in a notice on Jan. 16.

TSMC presently manufactures 3-nanometer chips and plans to start 2-nanometer mass manufacturing by 2025.

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