In recently released financial results for the second quarter of 2024, Taiwan Semiconductor Manufacturing Co. (TSMC) posted impressive figures reflecting its dominant market position and the growing demand for its advanced chip technologies.
TSMC is currently the 9th most valuable company in the world with a market cap of $836.35 billion, briefly exceeding $1 trillion recently, placing it in 8th place.
The company reported net sales of NT$673.51 billion (US$20.88 billion), marking a 40.1% increase from the previous year’s NT$480.84 billion (US$14.91 billion). Gross profit also rose significantly, reaching NT$358.13 billion (US$11.10 billion), up 37.6% year-over-year from NT$260.20 billion (US$8.07 billion). Operational income increased by 41.9% to NT$286.56 billion (US$8.88 billion) compared to NT$201.96 billion (US$6.26 billion) in the same quarter of the previous year. Net income grew by 36.3% to NT$247.85 billion (US$7.68 billion) from NT$181.80 billion (US$5.64 billion).
Despite healthy profits, a price hike appears to be imminent.
During a call with Wall Street analysts, Dr. C.C. Wei, TSMC’s Chairman and CEO, stated, “We are investing heavily in leading-edge specialty and advanced packaging technologies to support our customers’ growth and enable their success. If customers do well, TSMC should do well. For example, we are happy to see many of our customers’ structural profitability improving in these past few years. At the same time, we face rising cost challenges due to increasing process complexity, a leading load, higher electricity costs in Taiwan, global fiber expansion in higher-cost regions, and other cost inflation challenges. Therefore, we will continue to work closely with our customers to share our value. We will also work diligently with our suppliers to deliver on cost performance.”
Reporting on TSMC’s earnings, TheNextPlatform’s Timothy Prickett Morgan mused, “Maybe TSMC should buy Arm, build a cloud, and just cut out all the middle-people?” before adding, “You know we sometimes just say stuff to see what it sounds like, mostly for amusement’s sake…” While there is no suggestion of this happening, it wouldn’t be the maddest of ideas – TSMC certainly has the potential to assume a role beyond the boundaries of foundry service provider should it wish to.
For the third quarter of 2024, based on an exchange rate of US$1 to NT$32.5, TSMC anticipates revenues of between US$22.4 billion and US$23.2 billion, with expected gross profit margins ranging from 53.5% to 55.5% and operating profit margins between 42.5% and 44.5%. Profits will take a bit of a drop because TSMC is investing in its N2 2 nanometer and A16 16 angstrom processes for use in future products.
