Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday increased its projected revenue growth for this year to above 25 percent, as stronger-than-expected demand for premium smartphones and artificial intelligence (AI) devices are to drive greater utilization of cutting-edge 3-nanometer and 5-nanometer chips.
In April TSMC estimated 21 to 24 percent annual growth.
The firm’s revenue growth is on track to greatly outpace the global foundry industry, which is expected to rise about 10 percent this year.
Photo: Liao Chen-hui, Taipei Times
“Over the past three months, we have observed stronger AI and high-end smartphone demand from our customers, which is to boost the overall capacity utilization for our leading-edge 3-nanometer and 5-nanometer technologies in the second half of 2024,” TSMC chairman and CEO C.C. Wei (魏哲家) told an investors’ conference in Taipei yesterday. “Thus, we continue to expect 2024 to be a strong growth year for TSMC.”
TSMC hiked its capital expenditure budget for this year to between US$30 billion and US$32 billion, compared with an earlier expectation that it would be US$28 billion to US$32 billion.
Up to 80 percent of the new budget would be for advanced process technologies, it said.
TSMC expects 3-nanometer and 5-nanometer capacity to be tight this year and through next year, as most customers are trying to pack their devices with AI functions, Wei said.
Advanced packing capacity would continue to be constrained through next year, even though TSMC plans to more than double its chip-on-wafer-on-substrate capacity next year, he said.
For this quarter, TSMC expects revenue to reach an all-time high, expanding by 7.59 percent to 11.43 percent sequentially to between US$22.4 billion and US$23.2 billion compared with US$20.82 billion last quarter.
About half of TSMC’s revenue last quarter came from 3-nanometer and 5-nanometer chips, which were primarily used in AI applications and high-performance computing devices, it said.
“Moving into the third quarter, we expect our business to be supported by smartphone and AI demand for our leading-edge process technologies,” Wei said.
Gross margin is expected to improve further from 53.2 percent last quarter to between 53.5 percent and 55.5 percent this quarter, largely due to improved factory utilization, TSMC said.
The chipmaker maintained its long-term gross margin target at more than 53 percent, given mounting manufacturing costs, mainly from overseas fabs.
With two new fabs in Arizona and Kumamoto, Japan, to commence operations next year, gross margin would go down by 2 to 3 percentage points, it said.
Regarding former US president Donald Trump’s remarks that Taiwan took chip business from the US, Wei said that TSMC would stand pat on its global expansion strategy with ongoing projects in the US, Japan and Europe.
The chipmaker has no plans to form joint ventures to accelerate overseas capacity expansion, he added.
In the April-to-June quarter, TSMC’s net profit was NT$247.85 billion (US$7.6 billion), up 36.3 percent from NT$181.8 billion a year earlier and 9.9 percent from NT$225.49 billion in the previous quarter.
Earnings per share rose from NT$7.01 a year earlier and NT$8.7 a prior quarter to NT$9.56.
Operating margin rose from 42 percent a year earlier and the previous quarter to 42.5 percent, while operating margin surpassed the chipmaker’s guidance of 40 to 42 percent.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS