Taiwan Semiconductor Manufacturing Q2 2024 Earnings Summary $TSM
Taiwan Semiconductor Manufacturing reported Q2 2024 results that exceeded expectations, driven by strong demand for its advanced 3-nanometer and 5-nanometer technologies. The company recorded a revenue increase of 13.6% sequentially, or 10.3% in U.S. dollars, reaching $20.8 billion. CFO Wendell Huang noted, "Our second quarter EPS was 9.56 NT, and ROE was 26.7%, supported by improved capacity utilization."
The gross margin improved to 53.2%, aided by cost efficiencies and favorable exchange rates, despite some dilution from N3 ramp-up costs. Huang provided a positive outlook for Q3, projecting revenue between $22.4 billion and $23.2 billion. He remarked, "This represents a strong sequential growth driven by our leading-edge solutions."
CEO C.C. Wei emphasized the strong market dynamics, stating, "We expect our business to be supported by robust smartphone and AI-related demand." He pointed out that high-performance computing (HPC) accounted for 52% of revenue in Q2, showing a 28% increase quarter-over-quarter. Additionally, Wei highlighted that for the full year, the overall semiconductor market is forecasted to grow by 10%, with TSMC aiming for a revenue increase in the mid-20s percentage range.
Regarding future technology, TSMC is aggressively preparing for its upcoming 2-nanometer technology, indicated to be the most sought-after by AI innovators. Wei mentioned, "We expect the number of new tape-outs for 2-nanometer technologies to surpass both 3-nanometer and 5-nanometer in their initial years."
Looking ahead, TSMC's capital expenditures are set between $30 billion and $32 billion for 2024, with a significant focus on advanced technology. Wei noted, "70% to 80% of our CapEx will be directed towards advanced process technologies, driving our long-term growth."
Huang addressed challenges, noting that increased electricity costs and dilution from expanding overseas capacities in Arizona and Japan could impact margins. However, he affirmed, "We continue to forecast a long-term gross margin of 53% and higher is achievable."
The executives also discussed the ongoing demand for advanced packaging and CoWoS adaptations, with Wei saying, "The supply remains tight, but we are working with OSAT partners to enhance our capacity."
As a parting note, C.C. Wei assured that, beyond immediate challenges, TSMC remains committed to long-term growth, concluding, "Our disciplined investment strategy ensures we will meet our customers' needs while delivering value to shareholders."
This comprehensive report on TSMC's earnings highlights their robust market position and strategic direction, assuring investors of sustained growth potential in a rapidly evolving technology landscape.
