Key TakeawaysTaiwan Semiconductor Manufacturing Company reported second-quarter results that beat analysts' estimates amid surging demand for artificial intelligence chips.Sales rose 40% year-over-year, while profits rose 36%, with the company projecting continued growth for the third quarter.TSMC shares gained Thursday morning following the release, a day after TSMC and other semiconductor stocks tumbled on worries about how stricter trade restrictions and geopolitical tensions could affect the semiconduct ...

The semiconductor industry is the cornerstone of the global economy, underpinning the technology sector with products ranging from smartphones and computers to automobiles and advanced artificial intelligence applications. This sector witnessed a significant surge in stock prices in recent years, fueled by the increasing demand for semiconductors and a global chip shortage. However, recent months have seen a noticeable decline in chip stock prices, prompting investors to question whether this dip presents a ...

Financial Data and Key Metrics - Q2 2024 revenue increased by 13.6% sequentially in NT, or 10.3% in USD, driven by strong demand for 3nm and 5nm technologies, partially offset by smartphone seasonality [4] - Gross margin increased by 10 basis points sequentially to 53.2%, mainly due to cost improvements and favorable foreign exchange rates, partially offset by N3 ramp dilution [4] - Operating margin increased by 0.5 percentage points sequentially to 42.5%, with operating expenses accounting for 10.5% of net revenue [4] - Q2 EPS was 9.56 NT, and ROE was 26.7% [4] - Q3 2024 revenue guidance is between $22.4 billion and $23.2 billion, representing a 9.5% sequential increase or 32% YoY increase at the midpoint [7] - Q3 gross margin is expected to be between 53.5% and 55.5%, and operating margin between 42.5% and 44.5% [7] Business Line Data and Key Metrics - 3nm process technology contributed 15% of wafer revenue in Q2, while 5nm and 7nm accounted for 35% and 17% respectively [5] - Advanced technology (7nm and below) accounted for 67% of wafer revenue [5] - HPC revenue increased 28% QoQ, accounting for 52% of Q2 revenue, surpassing 50% for the first time [5] - Smartphone revenue decreased 1% to account for 33%, IoT increased 6% to account for 6%, Automotive increased 5% to account for 5%, and DCE increased 20% to account for 2% [5] Market Data and Key Metrics - The company ended Q2 with cash and marketable securities of 2 trillion NT ($63 billion USD) [6] - Current liabilities increased by 23 billion NT, mainly due to a 16 billion NT increase in accounts payable, while long-term interest-bearing debt increased by 9 billion NT due to corporate bond issuance [6] - Accounts receivable turnover days decreased by 3 days to 28 days, and inventory days decreased by 7 days to 83 days, primarily due to higher N3 wafer shipments [6] - Q2 cash flow from operations was 378 billion NT, with 206 billion NT spent on CapEx and 91 billion NT distributed as dividends [6] Company Strategy and Industry Competition - The company is narrowing its 2024 capital budget to $30 billion - $32 billion, with 70%-80% allocated to advanced process technologies, 10%-20% to specialty technologies, and 10% to advanced packaging, testing, and mask making [9] - TSMC is expanding its definition of the foundry industry to include packaging, testing, mask making, and IDM (excluding memory), estimating the market size at $250 billion in 2023, up from $115 billion under the previous definition [11] - The company expects the foundry industry to grow close to 10% YoY in 2024, with TSMC's market share increasing due to strong technology leadership and a broad customer base [12] - TSMC is investing heavily in N2, N2P, and A16 technologies, with N2 on track for volume production in 2025 and A16 scheduled for the second half of 2026 [16][17] Management Commentary on Operating Environment and Future Outlook - Management highlighted strong demand for AI-related and high-end smartphone products, leading to increased capacity utilization for 3nm and 5nm technologies in H2 2024 [12] - The company expects 2024 to be a strong growth year, with revenue growth slightly above the mid-20s percentage range in USD terms [12] - TSMC is confident in achieving a long-term gross margin of 53% and higher, despite challenges such as N3 ramp dilution, higher electricity prices, and global manufacturing expansion [8] Other Important Information - TSMC introduced N2P, an extension of the N2 family, with volume production scheduled for H2 2026, and A16, featuring Super Power Rail (SPR), which offers significant power and performance improvements [17] - The company is working with OSAT partners to increase CoWoS capacity to meet customer demand, with advanced packaging margins approaching corporate averages [50] Q&A Session Summary Question: AI Accelerator and CoWoS Capacity - TSMC expects supply-demand balance for AI accelerators and CoWoS to be reached by 2025 or 2026, with CoWoS capacity growing at a 60% CAGR over the next few years [20][22] - The company plans to more than double CoWoS capacity in 2025, following a similar expansion in 2024 [23] Question: Gross Margin Outlook - Gross margins are expected to improve in H2 2024, with long-term gross margins achievable at 53% and higher, despite dilution from overseas fabs and cost inflation [24][26][29] - Subsidies and ITC credits will offset some costs, with $1.5 billion in subsidies received in 2023, mainly from Japan [31] Question: Pricing Strategy and Leading-Edge Demand - TSMC's pricing strategy is strategic and varies by customer segment, with HPC customers willing to pay more for leading-edge nodes compared to smartphone customers [33][35][38] - Leading-edge capacity is expected to remain tight through 2025, with strong demand for N3 and N5 technologies [38] Question: Geopolitical Risk and Overseas Expansion - TSMC is continuing its overseas expansion plans in Arizona, Kumamoto, and potentially Europe, with no changes to its strategy despite geopolitical risks [39][41] - The company does not anticipate tariffs on shipments to U.S. customers, as customers typically bear import tariffs [42] Question: Advanced Packaging Profitability - Advanced packaging margins are improving and approaching corporate averages, with TSMC working with OSAT partners to increase capacity [48][50] Question: N2 and A16 Capacity Planning - N2 and A16 are expected to be larger nodes than previous generations, with strong demand from AI customers migrating aggressively to these technologies [52][55] - N3E is expected to improve returns and gross margins as it ramps, with dilution from N3 expected to decrease over time [56][58] Question: Node-to-Node Conversion Strategy - TSMC may convert more N5 tools to N3 to meet strong demand, with tool commonality between N5 and N3 exceeding 90% [61][63] Question: CoWoS Technical Constraints - Migration from CoWoS-S to CoWoS-L and CoWoS-R may alleviate some capacity constraints, but overall CoWoS supply remains tight [64][67] Question: N2 Revenue Contribution and Margin Dilution - N2 revenue contribution in 2026 is expected to be larger than N3 at a similar stage, with faster gross margin dilution recovery [69][71] Question: Edge AI and Advanced Packaging - Edge AI customers are expected to adopt 3D IC or SoIC solutions in the next two years, with smartphone customers also considering these technologies [72][74] Question: Smartphone and PC Silicon Content - AI functionality is expected to increase die sizes by 5%-10%, with unit growth likely to accelerate in two years [76][78] Question: Demand Volatility and Capacity Planning - TSMC is managing demand volatility through a disciplined capacity planning process, with generative AI demand seen as more sustainable than previous cycles [80][84] Question: Super Power Rail (SPR) and Data Center Demand - SPR technology is expected to significantly reduce system-level power consumption, particularly for data center customers [86][88] Question: A16 Capacity Expansion Bottlenecks - Key bottlenecks for A16 capacity expansion include land, electricity, and talent availability [89][91] Question: Product Launch Cadence and Capacity Planning - TSMC is prepared for accelerated product launch cadences announced at Computex, with capacity planning aligned with customer needs [93][95] Question: Fan-Out Panel-Level Packaging - TSMC is exploring fan-out panel-level packaging, but the technology is not expected to mature for at least three years [96][99]

Taiwan Semiconductor Manufacturing Company on Thursday beat revenue and profit expectations in the second quarter, as demand for advanced chips used in AI applications continue to surge.Here are TSMC's second-quarter results versus LSEG consensus estimates:Revenue: 673.51 billion New Taiwan dollars ($20.82 billion), vs. NT$657.58 billion expectedNet income: NT$247.85 billion, vs. NT$238.8 billion expectedTSMC reported net revenue rose 40.1% from a year ago to NT$673.51 billion, while net income increased 36 ...

Unleash Innovation 2024 Second Quarter Earnings Conference July 18, 2024 Unleash Innovation © 2024 TSMC, Ltd 0 TSMC Property Agenda • 2Q24 Financial Results and 3Q24 Outlook Wendell Huang, CFO • Q&A Unleash Innovation • Welcome Jeff Su, IR Director • Key Messages Wendell Huang, CFO C.C. Wei, Chairman & CEO © 2024 TSMC, Ltd 1 TSMC Property Safe Harbor Notice • TSMC's statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and actual results may dif ...

Financial Performance - Net revenue for Q2 2024 reached $20.822 billion, representing a 40.1% increase year-over-year compared to $14.153 billion in Q2 2023[4] - Gross profit for Q2 2024 was $11.072 billion, with a gross margin of 53.2%, compared to 54.1% in Q2 2023[4] - Operating income for Q2 2024 was $8.859 billion, accounting for 42.5% of net revenue, up from 42.0% in Q2 2023[4] - Net income for Q2 2024 was $7.657 billion, a 36.8% margin, compared to $5.634 billion in Q2 2023[4] - Earnings per share (diluted) for Q2 2024 was $0.30, compared to $0.27 in Q2 2023[4] - For the first half of 2024, net revenue totaled $39.695 billion, a 28.0% increase from $31.015 billion in the first half of 2023[6] - Comprehensive income for Q2 2024 was $8.073 billion, compared to $5.869 billion in Q2 2023[4] Assets and Liabilities - Total assets increased to $184,129 million as of June 30, 2024, up 3.4% from $179,656 million in the previous quarter and up 16.2% from $151,230 million year-over-year[1] - Total current liabilities amounted to $32,284 million, a 2.2% increase from the previous quarter and a 29.4% increase year-over-year[1] - The company reported a total of $66,550 million in liabilities, which is a 1.9% increase from the previous quarter and an 11.2% increase year-over-year[1] - The total shareholders' equity reached $117,579 million, reflecting a 4.2% increase from the previous quarter and a 19.2% increase year-over-year[1] - Total current assets increased by NT$138.89 billion, primarily due to a NT$125.98 billion increase in cash and marketable securities[25] - Total assets increased to NT$5,982.36 billion, with total liabilities at NT$2,162.22 billion, resulting in total shareholders' equity of NT$3,820.14 billion[55] Cash Flow and Investments - Cash generated by operating activities was USD 25,519 million for the six months ended June 30, 2024[8] - Net cash used in investing activities was USD 11,205 million for the six months ended June 30, 2024[8] - Net cash used in financing activities was USD 5,077 million for the six months ended June 30, 2024[8] - Cash generated from operating activities totaled NT$377.67 billion in Q2 2024, including NT$306.31 billion from income before tax[34] - Cash from operating activities for Q2 2024 was NT$377.67 billion, with free cash flow of NT$171.99 billion[57] - Capital expenditures totaled US$6.36 billion in 2Q24, reflecting ongoing investments in technology and capacity[33] Operational Metrics - Advanced technologies (7nm and below) accounted for 67% of total wafer revenue in Q2 2024[15] - Revenue from High Performance Computing (HPC) and Smartphone platforms represented 52% and 33% of net revenue respectively in Q2 2024[15] - Shipments of 3-nanometer technology accounted for 15% of total wafer revenue, while advanced technologies (7-nanometer and above) represented 67% of total wafer revenue[62] - Days of receivable decreased to 28 days in 2Q24, while days of inventory decreased to 83 days[27] Shareholder Information - The company declared a cash dividend of NT$4.00 for Q1 2024, with distribution scheduled for October 9, 2024[59] - The weighted average outstanding shares (diluted) for Q2 2024 were approximately 25.931 million[4] - Diluted earnings per share (EPS) for Q2 2024 was NT$9.56 (US$1.48 per ADR unit), marking a significant increase compared to the same period last year[61] Research and Development - Research and development expenses for the first half of 2024 were $2.952 billion, representing 7.4% of net revenue[6] Company Events - The company celebrated its 30th North America Technology Symposium, highlighting innovations in AI and silicon leadership[35]

Loading... Loading... Taiwan Semiconductor Manufacturing Co. Ltd. TSM is announcing its second-quarter earnings on Thursday. Wall Street expects $1.38 in EPS and $20 billion in revenues as the company reports before market hours. The stock is up 67.23% over the past year, +69.12% YTD. Let's look at what the charts indicate for Taiwan Semiconductor (aka TSMC) stock, and how the stock currently maps against Wall Street estimates. TSMC Price Charts Bearish Ahead Of Q2 Earnings Taiwan Semiconductor stock faces ...

AI is driving strong demand for Taiwan Semiconductor and its high-profile customers.Shares of Taiwan Semiconductor Manufacturing (TSM 0.44%), also known as TSMC, rose 63% in the first six months of 2024, according to data provided by S&P Global Market Intelligence. TSMC is the world's biggest microchip manufacturer, and its list of customers includes several of the largest semiconductor companies. It's been producing impressive financial results as the semiconductor industry rebounds from a cyclical slowdow ...

Shares of the world's top third-party chip foundry have almost doubled year to date.Taiwan Semiconductor Manufacturing  (TSM 0.44%) has had a great 2024, as it's up more than 80%. With that kind of performance in the rear-view mirror, many investors may wonder if they've missed the boat.Possibly not: Several positive trends are on the horizon, and this could be the start of something even bigger.Taiwan Semiconductor is a key part of AI proliferationTaiwan Semiconductor is the world's largest contract chip m ...

Former U.S. President Donald Trump speaks during a campaign rally at the Butler Farm Show in Butler, Pennsylvania, on July 13, 2024.Former U.S. President Donald Trump, who is vying for another White House mandate, said he thinks Taiwan should pay the U.S. for defense, claiming that the country "doesn't give us anything."His comment was in response to a question on whether he would defend Taiwan against China, as part of an interview with Bloomberg Businessweek published on Monday.Beijing considers democrati ...