U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose 4% in premarket trading Thursday after the world's largest contract chip manufacturer posted better-than-expected fourth-quarter profit and a bullish outlook for artificial intelligence (AI) demand. TSMC, which supplies tech heavyweights such as Apple (AAPL) and Nvidia (NVDA), posted profit of 374.68 billion New Taiwan dollars ($11.37 billion), a 57% year-over-year surge, or NT$14.45 ($0.44) per share. Analysts polled by Visible Alpha ...

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 14.3% sequentially in NT, driven by strong demand for 3 nanometer and 5 nanometer technologies [9] - Gross margin rose by 1.2 percentage points sequentially to 59%, reflecting higher capacity utilization and productivity gains [10] - Operating margin increased by 1.5 percentage points sequentially to 49% [10] - Full year 2024 revenue increased by 30% in US dollar terms to $90 billion, with gross margin up 1.7 percentage points to 56.1% [17] - Full year EPS increased by 39.9% to TWD 45.25, and ROE increased by 4.1 percentage points to 30.3% [17] Business Line Data and Key Metrics Changes - 3 nanometer process technology contributed 26% of wafer revenue in Q4, while 5 nanometer and 7 nanometer accounted for 34% and 14%, respectively [11] - High-Performance Computing (HPC) revenue increased by 19% quarter-over-quarter, accounting for 53% of Q4 revenue [12] - Smartphone revenue increased by 17% to account for 35% of Q4 revenue, while IoT decreased by 15% to 5% [12] - For the full year, HPC revenue increased by 58% year-on-year, while smartphone revenue increased by 23% [13] Market Data and Key Metrics Changes - Advanced technologies (7 nanometer and below) accounted for 74% of wafer revenue in Q4, up from 58% in 2023 [11][12] - The Foundry 2.0 industry grew by 6% year-over-year in 2024, slightly lower than previous forecasts [31] - TSMC forecasts the Foundry 2.0 industry to grow by 10% year-over-year in 2025, supported by robust AI-related demand [32] Company Strategy and Development Direction - TSMC plans to invest between $38 billion and $42 billion in capital expenditures for 2025, focusing on advanced process technologies [27] - The company aims to capture growth from industry megatrends such as 5G, AI, and HPC [27][37] - TSMC is expanding its global manufacturing footprint, with new fabs in the US, Japan, and Europe to meet customer demand [39][42][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming industry growth, forecasting a revenue increase of close to mid-20s percent in US dollar terms for 2025 [33] - AI-related demand is expected to double in 2025, with AI accelerators projected to be the strongest driver of HPC platform growth [34][36] - Management acknowledged potential challenges from inflationary costs and ramp-up expenses associated with new fabs [24][25] Other Important Information - TSMC's effective tax rate for 2025 is expected to be between 16% and 17% [19] - The company generated TWD 1.8 trillion in operating cash flow and TWD 870 billion in free cash flow in 2024 [18] Q&A Session Summary Question: TSMC's US Future Strategy - Management discussed the potential for investing in the latest technology nodes in the US, emphasizing the need for close proximity to R&D for ramping new technologies [54][60] - The company maintains open communication with the US government and is focused on customer needs for overseas fab expansion [62] Question: Gross Margins Outlook - Management indicated that reaching over 60% gross margin is possible if utilization remains high, but noted that US fab costs are higher due to several factors [66][72] Question: AI Business Opportunities - Management confirmed ongoing collaboration with memory suppliers for HBM controllers, with high volume expected in the next year [88] Question: Impact of US Export Restrictions on China Business - Initial assessments suggest that the impact of new US export restrictions on TSMC's China business is manageable [93] Question: Arizona Fab Update - The first fab in Arizona is in volume production, with the second fab's construction nearly complete and plans for a third fab underway [106] Question: Long-term Gross Margin Target - Management reiterated that the long-term gross margin target remains at 53% and higher, citing various factors affecting profitability [121] Question: CoWoS Capacity and Non-AI Applications - Management acknowledged current high demand for AI-related applications but indicated that non-AI applications will also adopt CoWoS technology in the future [125]

On Thursday, Taiwan Semiconductor Manufacturing Co’s TSM fourth-quarter results beat forecasts, fueled by demand for advanced processor node technologies for artificial intelligence applications.The contract chipmaker, which supplies chips for Nvidia Corp’s NVDA graphics processing unit (GPU) and Apple, Inc’s AAPL smartphones, guided first-quarter revenue above the consensus.Taiwan Semiconductor reported fourth-quarter revenue of $26.88 billion (NT$868.46 billion), up 38.8% year-over-year, topping the analy ...

This article has been reviewed according to Science X's editorial process and policies . Editors have highlighted the following attributes while ensuring the content's credibility: Taiwan Semiconductor Manufacturing Company said its net profit for the three months to December jumped 57 percent on-year. Taiwanese chipmaking giant TSMC on Thursday announced a better-than-expected net profit for the fourth quarter as it benefits from booming demand for AI technology. Taiwan Semiconductor Manufacturing Compa ...

® Unleash Innovation 2024 Fourth Quarter Earnings Conference January 16, 2025 © 2025 TSMC, Ltd TSMC Property © 2025 TSMC, Ltd TSMC Property Agenda Jeff Su, IR Director Wendell Huang, CFO Wendell Huang, CFO C.C. Wei, Chairman & CEO • Q&A 1 Safe Harbor Notice © 2025 TSMC, Ltd 2 TSMC Property • TSMC's statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and actual results may differ materially from those contained in the forward-looking statements ...

® Unleash Innovation 2024 Fourth Quarter Earnings Conference January 16, 2025 © 2025 TSMC, Ltd Wendell Huang, CFO C.C. Wei, Chairman & CEO • Q&A TSMC Property 1 Jeff Su, IR Director • Welcome • 4Q24 Financial Results and 1Q25 Outlook • Key Messages TSMC Property © 2025 TSMC, Ltd Agenda Wendell Huang, CFO Safe Harbor Notice Unleash Innovation Statements of Comprehensive Income Selected Items from Statements of Comprehensive Income | | | 4Q24 | | | 4Q24 | 4Q24 | | --- | --- | --- | --- | --- | --- | --- | | | ...

A logo of Taiwan Semiconductor Manufacturing Company (TSMC) is seen during the TSMC global RnD Center opening ceremony in Hsinchu on July 28, 2023. (Photo by Amber Wang / AFP)Taiwan Semiconductor Manufacturing Company's fourth-quarter revenue and profit beat expectations, as demand for advanced chips used in artificial intelligence applications continued to surge.Here are TSMC's fourth-quarter results versus LSEG consensus estimates:Net revenue: 868.46 billion New Taiwan dollars ($26.36 billion), vs. NT$850 ...

Earnings Expectations - Q4 sales are expected to increase 34% to $26 38 billion compared to $19 62 billion in the same quarter last year [2] - Q4 EPS is projected to spike 50% to $2 16 versus $1 44 per share a year ago [2] - The company has posted an average EPS surprise of 7 9% in its last four quarterly reports [2] Financial Outlook - Total sales are expected to increase 29% for fiscal 2024 and expand another 25% in FY25 to $111 33 billion [3] - Annual earnings are projected to spike 33% to $6 92 per share in FY24 compared to $5 18 in FY23 [4] - FY25 EPS is expected to rise 27% to $8 81 [4] - FY24 and FY25 EPS estimates have trended lower over the last two months [4] Stock Performance & Valuation - TSM stock has soared over +100% in the last year outperforming broader indexes and Qualcomm (QCOM) while nearing Nvidia's (NVDA) gains of +141% [5] - TSM is trading at a 22 6X forward earnings multiple near the S&P 500 benchmark below Nvidia's 44 8X but above Qualcomm's 14 3X [6] Investment Consideration - Taiwan Semiconductor is considered one of the most appealing long-term growth prospects in the tech sector [8] - The company currently holds a Zacks Rank 4 (Sell) due to declining earnings estimate revisions [8] - Strong Q4 results are needed to reconfirm the company's attractive outlook after its extensive stock rally [8]

Considering how well artificial intelligence (AI) stocks have done over the past two years, it's hard to imagine some of them going even higher. However, this industry still has significant tailwinds as we have barely scratched the surface of what is possible with AI.However, picking which companies will emerge as the victors in the AI arms race isn't easy. That's why I'm focusing more on the companies selling the tools needed to participate in this AI arms race. One of the top companies in this realm is Ta ...

A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.Analyst’s Disclosure: I/we have a beneficial long position in the shares of TSM either through stock ownership, options, or other derivatives. I wrote this ...