Amid the ever-evolving landscape of the semiconductor industry, key Apple and Nvidia supplier, Taiwan Semiconductor Manufacturing Company (NYSE:TSM), has released its first-quarter financial results for 2024, showcasing substantial growth compared to the previous year.
What Happened: On Thursday, TSMC unveiled its financial achievements for the first quarter, highlighting a notable increase in year-over-year figures. The company’s consolidated revenue reached NT$592.64 billion ($18.87 billion) with net income hitting NT$225.49 billion ($6.97 billion).
The leading semiconductor manufacturer saw a 16.5% surge in revenue over the same period last year. Net income and diluted earnings per share (EPS) both experienced an 8.9% rise. Despite these gains, TSMC experienced a slight decline from the fourth quarter of 2023, with revenue and net income decreasing by 5.3% and 5.5%, respectively.
The company reported a gross margin of 53.1%, an operating margin of 42.0%, and a net profit margin of 38.0%.
TSM earnings report (SOURCE: TSM)
Advanced technologies, including 7-nanometer processes and more sophisticated ones, accounted for 65% of TSMC’s total wafer revenue. In detail, 3-nanometer technology comprised 9%, 5-nanometer contributed 37%, and 7-nanometer made up 19% of the wafer revenue.
Apple had secured most of TSMC's initial 2-nanometer production capacity, continuing Apple's earlier approach of utilizing TSMC's 3-nanometer technology predominantly for its A17 Pro and M3 chip families. In February, Apple was reportedly developing processors that would utilize TSMC’s 2-nanometer fabrication process.
Analysts believe that TSMC's biggest buyer is Apple, known as “Customer A” in its official documents. Apple made up 25% of TSMC’s yearly income in 2023, totaling $17.5 billion. Another significant customer, referred to as “Customer B,” is likely Nvidia which contributed 11% of TSMC's revenue, amounting to around $7.73 billion.
While TSMC doesn't reveal all its clients, it is assumed that companies like AMD, Broadcom, and Qualcomm are among them.
Why It Matters: TSMC’s robust financial performance is a bellwether for the semiconductor sector, reflecting broader industry dynamics. The company’s pivotal role as a supplier to major tech corporations worldwide makes its growth in advanced technologies revenue particularly noteworthy. This trend highlights the escalating demand for high-performance chips, which are crucial in various sectors, including consumer electronics, automotive, and industrial applications. TSMC’s results are a key metric for investors and analysts to assess the industry’s future direction and any impending changes in the supply chain.
Speculation about TSMC’s performance was rife, following a disappointing earnings report from rival ASML Holding N.V., which led to a dip in TSMC’s shares. Moreover, options trading activity indicated a bullish sentiment among financial giants towards TSMC, with a significant number of unusual trades being placed just before the earnings release.
According to Benzinga Pro, TSM closed at $139.03 on Wednesday, a decline of 0.55% since its previous close.
Read Next: The Court Case That Could Change The Cannabis Industry Forever And How It Affects Rescheduling
Image via Shutterstock
Engineered by Benzinga Neuro, Edited by
Pooja Rajkumari
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you.
Learn more.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
