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Taiwan Semiconductor Manufacturing Company topped analysts’ expectations for the second quarter, reporting revenue of $20.82 billion for fiscal year 2024— up 40% from a year ago.
The Taiwanese chipmaker reported NT$247.85 billion in profits this quarter, or $7.6 billion, a 36% rise from the year ago period. That beat analysts’ expected net income of NT$236.4 billion, or $7.3 billion, for the second quarter of 2024, according to FactSet — a 30% increase from a year ago, when it reported profit of NT$181.8 billion. TSMC, which has an exclusive partnership with AI chip designer Nvidia and fabricates chips for Apple, has seen its shares rise nearly 70% so far this year.
In a call with analysts, TSMC’s chief executive officer C.C. Wei said that AI is “so hot” right now, and that all of the company’s customers want to put AI capabilities into their devices. He added that he expects production will catch up with demand by 2025 or 2026, but that supply will remain tight until then.
“I also tried to reach the supply and demand balance, but I cannot today,” he said. “The demand is so high I had to work very hard to meet my customers’ demand.”
Taiwan-listed shares of the chipmaker ended Thursday down 2.43%.
TSMC predicted in April its second-quarter sales could rise by up to 30% — higher than projected — due to demand from its customers including Nvidia and Apple. It set second-quarter revenue expectations to between $19.6 billion and $20.4 billion, higher than the earlier estimated $19.1 billion. TSMC also said it was keeping plans to spend up to $32 billion this year, a majority of which will go toward advanced technologies.
In June, TSMC said its net revenue in May rose 30% year-over-year to $7.1 billion. While that was a decrease of 2.7% from April, the company’s revenue for the period of January through May saw a year-over-year increase of 27%.
TSMC chairman and chief executive C.C. Wei reaffirmed previous projections in June that the chip market, excluding the memory sector, would experience 10% growth this year driven by the AI boom.
Global chip stocks, including TSMC’s, fell Wednesday morning following news of the Biden administration’s reported consideration of tougher trade restrictions and remarks by former President Donald Trump on Taiwan. TSMC’s Taiwan-listed shares were down 2.4% at the market close. The Biden administration is reportedly debating using an export control called the foreign direct product rule on allies including Japan and the Netherlands if their companies continue selling advanced chipmaking technology to China.