TSMC Reports Stellar September, Poised for Strong Q3 Amid AI Chip Demand Surge
Benefiting from the growing demand for artificial intelligence, the world's largest chip foundry, Taiwan Semiconductor Manufacturing Company (TSMC), announced optimistic monthly data for September on Wednesday (October 9), indicating that the company is set for a bumper season in the third quarter (July-September).
The company has been at the forefront of artificial intelligence, with major clients including Apple and Nvidia.
TSMC's revenue report for September 2024 shows that the consolidated revenue for the month was approximately NT$251.873 billion ($7.826 billion), an increase of 0.4% from the previous month and a 39.6% increase from the same period last year.
The calculated revenue for TSMC from July to September this year was NT$759.69 billion ($23.62 billion), higher than the average forecast of NT$750.36 billion ($23.33 billion) given by analysts, and also higher than TSMC's performance outlook of $22.4-$23.2 billion. The revenue for the same period last year was $17.3 billion, a year-on-year increase of 36.5%.
Although the third-quarter figures have not been officially announced, the above data provides a relatively intuitive comparison, reflecting that the third-quarter revenue will easily exceed market forecasts and the company's previous expectations.
It is reported that TSMC's third-quarter corporate briefing for 2024 will be held on October 17, when the complete third-quarter performance will be announced, and the company's financial forecast will be updated. It is worth mentioning that TSMC's monthly revenue data is usually only calculated in New Taiwan dollars, while quarterly revenue data and quarterly earnings forecasts are calculated in US dollars.
Meanwhile, notably, Morgan Stanley analysts said in a research report that driven by the demand for artificial intelligence chips and the outsourcing of integrated device manufacturers, TSMC may continue to achieve a compound annual growth rate of revenue of 15%-20% over the next five years. They said that driven by strong demand for artificial intelligence chips and the further increase in Apple's 3-nanometer chip production, TSMC's gross margin may slightly increase from 55% in the third quarter to 55.5% in the fourth quarter.
They said that after successfully raising wafer prices, TSMC is expected to maintain a gross margin of around 55% in 2025 and beyond, and the price increase will take effect next year. They added that considering the price of artificial intelligence chips is expected to rise by at least 10%, other high-performance computing chips by 6%, and smartphone chips by 3%, the price increase in 2025 may average 4%-5%, and the gross margin will increase by 2-3 percentage points.