TSMC beats first-quarter revenue and profit expectations on strong AI chip demand

cnbc.com:

Taiwan Semiconductor Manufacturing Company on Thursday beat revenue and profit expectations in the first quarter, thanks to continued strong demand for advanced chips, particularly those used in AI applications.

Here are TSMC's first-quarter results versus LSEG consensus estimates:

TSMC reported net revenue rose 16.5% from a year ago to NT$592.64 billion, while net income increased 8.9% from a year ago to NT$225.49 billion. The firm guided first-quarter revenue to be between $18 billion and $18.8 billion.

TSMC is the world's largest producer of advanced processors and counts companies such as Nvidia and Apple as its clients.

«For the second quarter of 2024, we expect our business to be supported by strong demand for industry-leading 3-nanometer and 5-nanometer technologies, partially offset by a continued smartphone seasonality,» CFO Wendell Huang said during the firm's earnings call Thursday.

CEO C.C. Wei said TSMC expects 2024 to be a «healthy» growth year, supported by «our technology leadership and broader customer base.»

«Almost all the AI innovators are working with TSMC to address an insatiable AI-related demand for energy efficient computing power,» said Wei, adding that the firm estimates revenue contribution from server AI processors to «more than double this year.»

TSMC expects second-quarter revenue to be between $19.6 billion and $20.4 billion.

TSMC currently produces 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025. Typically, a smaller nanometer size yields more powerful and efficient chips. 

Strong demand for AI chips led by the proliferation of large language models such as ChatGPT and Chinese clones has caused TSMC's shares to surge 56% in the past one year.

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