Taiwan Semiconductor Manufacturing Co. (TSMC) has released its financial results for the second quarter of 2024, showcasing strong performance and increased demand for its advanced chip technologies. As the 9th most valuable company globally, with a market cap of $836.35 billion, TSMC’s value recently surpassed $1 trillion briefly, elevating it to the 8th spot.
Financial Highlights
- Net Sales: TSMC reported net sales of NT$673.51 billion (US$20.88 billion), a remarkable 40.1% increase from last year’s NT$480.84 billion (US$14.91 billion).
- Gross Profit: The gross profit reached NT$358.13 billion (US$11.10 billion), a 37.6% rise from the previous year’s NT$260.20 billion (US$8.07 billion).
- Operational Income: Operational income saw a 41.9% increase to NT$286.56 billion (US$8.88 billion), compared to NT$201.96 billion (US$6.26 billion) in the same quarter last year.
- Net Income: Net income grew by 36.3%, reaching NT$247.85 billion (US$7.68 billion) from NT$181.80 billion (US$5.64 billion).
Future Outlook and Challenges
Despite the strong profits, TSMC is anticipating price increases. Dr. C.C. Wei, TSMC’s Chairman and CEO, explained that the company is heavily investing in cutting-edge technologies to support customer growth, but faces rising costs due to increased process complexity, higher electricity costs in Taiwan, and global expansion into higher-cost regions. Dr. Wei emphasized the importance of working closely with customers and suppliers to manage these costs.
Speculations and Projections
Timothy Prickett Morgan from TheNextPlatform humorously suggested that TSMC might consider acquiring Arm and building a cloud service, cutting out intermediaries. While this is not an actual proposal, it highlights TSMC’s potential to expand beyond its current role as a foundry service provider.
Looking ahead to the third quarter of 2024, TSMC expects revenues between US$22.4 billion and US$23.2 billion, with gross profit margins between 53.5% and 55.5%, and operating profit margins ranging from 42.5% to 44.5%. These projections account for investments in new processes like N2 2 nanometer and A16 16 angstrom, which are expected to impact profits slightly in the short term.
