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TSMC posts second-quarter profit, outpaces revenue amid AI chip boom

Posted on by darion

Key conclusions

  • Taiwan Semiconductor Manufacturing Company reported second-quarter results that beat analysts’ estimates, helped by growing demand for artificial intelligence chips.
  • Sales were up 40% year-over-year, with profits up 36%. The company is forecasting further growth in the third quarter.
  • TSMC shares rose Thursday morning after the report was released, a day after TSMC and other semiconductor stocks plunged on concerns about how tighter trade restrictions and geopolitical tensions could impact the semiconductor industry.

Taiwan Semiconductor Manufacturing Company’s (TSM) American Depositary Receipts (ADRs) rose on Thursday after the chipmaker reported second-quarter results that beat analysts’ estimates amid rising demand for artificial intelligence (AI) chips.

TSMC reported revenue that was 40% higher than in the same period last year, reaching NT$673.51 billion (USD$20.62 billion), exceeding analysts’ expectations. Earnings rose just over 36% year over year to NT$247.85 billion ($7.59 billion), beating estimates. On a per-share basis, TSMC earned NT$9.56 per share, or $1.48 per ADR, also beating forecasts.

TSMC expects strong demand for AI and smartphones in Q3

TSMC expects third-quarter sales of $22.4 billion to $23.2 billion, which would be an increase of about 30% to 33% from the $17.28 billion it reported last year.

“Our business in the second quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” said TSMC Chief Financial Officer Wendell Huang. “As we enter the third quarter of 2024, we expect our business to be supported by strong demand for our leading-edge smartphone and AI process technologies.”

TSMC ADRs were up 2.4% at $171.20 as of 8:45 a.m. ET on Thursday after the news, a day after shares of TSMC and other chipmakers fell on concerns about how tightening trade restrictions and geopolitical tensions could impact the semiconductor industry.