Technology
Thursday, January 18th, 2024 4:33 pm EDT
Key Points
- Strong Financial Performance: Taiwan Semiconductor Manufacturing Company (TSMC) reported better-than-expected financial results for the fourth quarter. The company’s revenue amounted to 625.53 billion New Taiwan dollars ($19.62 billion), surpassing the expected 618.31 billion New Taiwan dollars. Net income also exceeded expectations, reaching NT$238.71 billion compared to the expected NT$225.22 billion. Despite a 1.5% decline in revenue and a 19.3% drop in net income from the previous year, TSMC’s sequential revenue increased by 14.4% in the fourth quarter, driven by the strong ramp-up of its 3-nanometer technology.
- Challenging Semiconductor Industry Landscape in 2023: CEO C.C. Wei acknowledged that 2023 was a challenging year for the global semiconductor industry due to macroeconomic conditions and an inventory adjustment cycle. Other chipmakers like Samsung Electronics and SK Hynix reported declines in quarterly profits, primarily caused by decreased demand for consumer electronics post-pandemic. TSMC, a major supplier for Apple and Nvidia, faced challenges but expressed confidence in its ability to capture growth opportunities, particularly in high-performance computing related to generative AI applications.
- Optimistic Outlook for 2024: Despite the challenges in 2023, TSMC is optimistic about 2024 and anticipates it to be a healthy growth year. The company is well-positioned to benefit from the continuous strong ramp-up of its industry-leading three-nanometer technologies, increased demand for five-nanometer technologies, and robust AI-related demand. TSMC expects first-quarter revenue to range between $18 billion and $18.8 billion in 2024. The company’s strategic focus on nanometer technologies, including the production of 3-nanometer chips, positions it as a major beneficiary in AI semiconductors. The anticipated surge in AI-based PC applications in 2024 underscores TSMC’s crucial role and dominance in providing sophisticated nanometer technologies for AI-enhanced computing devices. TSMC is currently manufacturing 3-nanometer chips and plans to commence mass production of 2-nanometer chips by 2025.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, reported better-than-expected financial results for the fourth quarter despite facing challenges in the global semiconductor industry. TSMC’s revenue reached 625.53 billion New Taiwan dollars ($19.62 billion), surpassing the expected 618.31 billion New Taiwan dollars. Net income was NT$238.71 billion, exceeding the expected NT$225.22 billion. The company’s revenue decreased 1.5% from the previous year, and net income dropped 19.3%. TSMC attributed the sequential revenue increase of 14.4% in the fourth quarter to the strong ramp-up of its industry-leading 3-nanometer technology.
Facing a challenging year for the semiconductor industry in 2023 due to macroeconomic conditions and inventory adjustments, TSMC remained well-positioned to benefit from high-performance computing-related growth opportunities, particularly driven by the emergence of generative AI applications. CEO C.C. Wei expressed optimism about 2024, anticipating it to be a healthy growth year for TSMC. The company expects continuous strong ramp-up of its three-nanometer technologies, robust demand for five-nanometer technologies, and increased demand for AI-related applications. However, Wei highlighted persistent macroeconomic headwinds that could impact consumer sentiment and market demand.
TSMC, a key supplier for Apple and Nvidia, has been instrumental in producing advanced processors for Apple’s iPhones. The firm emphasized its focus on nanometer technology, with plans to commence mass production of 2-nanometer chips by 2025. Analysts believe that TSMC’s strength in nanometer technology, particularly its 3-nanometer chips, positions it as a major beneficiary in the AI semiconductor market. The smaller nanometer sizes on chips result in more powerful and efficient chips, and TSMC’s anticipated surge in AI-based PC applications in 2024 is expected to reinforce its dominance in providing sophisticated nanometer technologies for AI-enhanced computing devices. Despite uncertainties, TSMC’s strategic positioning and technological advancements bode well for its performance in the semiconductor industry.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/18/tsmc-q4-2023-earnings-report.html
