TSMC (NYSE: TSM ) has rallied 13% since our last coverage, narrowing the gap toward our target price of $210. Following its Q3 2024 earnings, which showed substantial year-over-year (YoY) revenue and profit growth, we believe TSMC’s long-term prospectsYiannis Zourmpanos, founder of Yiazou IQ, an AI-driven stock research platform providing all-in-one stock reports. Experience: Previously worked at Deloitte and KPMG in external/internal auditing and consulting. Education: Chartered Certified Accountant, Fello ...

Technology stocks, specifically chipmakers, could lead from the front on Thursday as a stellar third-quarter earnings report from Taiwan Semiconductor Manufacturing Company Ltd. TSM is triggering positive sentiment toward all artificial intelligence plays. Oil prices have rebounded and gold traded at a fresh record, while bond yields held steady ahead of a slew of market-moving data that include retail sales, a regional manufacturing activity index, industrial production, and jobless claims.Earnings news co ...

KEY TAKEAWAYSU.S.-listed Taiwan Semiconductor Manufacturing Co. shares are jumping 8% in premarket trading after the chipmaker posted a quarterly earnings surge and projected a buoyant outlook on the back of the artificial intelligence (AI) boom.The company, which supplies tech heavyweights such as Apple and Nvidia, reported a better-than-expected 54% year-over-year rise in third-quarter net income of 325.3 billion New Taiwan dollars ($10.12 billion).TSMC also reported a 39% jump in revenue to NT$759.69 bil ...

Financial Data and Key Metrics - Q3 2024 revenue increased 12.8% sequentially in NT, driven by strong smartphone and AI-related demand for 3nm and 5nm technologies [4] - Gross margin increased by 4.6 percentage points sequentially to 57.8%, reflecting higher capacity utilization and cost improvements [4] - Operating margin increased by 5 percentage points sequentially to 47.5%, with EPS at 12.54 NT and ROE at 33.4% [5] - Cash and marketable securities stood at 2.2 trillion NT ($69 billion USD) at the end of Q3 2024 [6] - Q4 2024 revenue guidance is between $26.1 billion and $26.9 billion USD, representing a 13% sequential increase or 35% YoY increase at the midpoint [7] Business Line Data and Key Metrics - 3nm process technology contributed 20% of wafer revenue in Q3, while 5nm and 7nm accounted for 32% and 17% respectively [5] - Advanced technologies (7nm and below) accounted for 69% of wafer revenue [5] - HPC revenue increased 11% QoQ to account for 51% of Q3 revenue, while smartphone revenue increased 16% to account for 34% [5] - IoT revenue increased 35% to account for 7%, and automotive revenue increased 6% to account for 5% [5] Market Data and Key Metrics - AI-related demand, particularly for server AI processors, is expected to more than triple in 2024, accounting for mid-teens percentage of total revenue [11] - The company forecasts four-year revenue to increase by close to 30% in USD terms [11] - Overseas fabs in Arizona and Japan are progressing well, with volume production expected to start in 2025 and 2027 respectively [12][13][14] Company Strategy and Industry Competition - TSMC plans to invest slightly over $30 billion USD in 2024 CapEx, with 70%-80% allocated for advanced process technologies [9] - The company is leveraging its manufacturing technology leadership and large-scale manufacturing base to remain cost-effective in a fragmented globalization environment [15] - TSMC is expanding its global manufacturing footprint, with fabs in Arizona, Japan, and Germany, to meet customer needs and maximize shareholder value [12][13][14] Management Commentary on Operating Environment and Future Outlook - Management views AI demand as real and sustainable, driven by tangible ROI benefits from AI applications in productivity and efficiency [20][21] - The company expects strong demand for leading-edge process technologies to continue into Q4 2024 and beyond [10][11] - TSMC is confident in its ability to deliver the same level of manufacturing quality and reliability from overseas fabs as from its fabs in Taiwan [12][13] Other Important Information - Inventory days increased by four days to 87 days due to the pre-build of N3 and N5 wafers [6] - Electricity prices in Taiwan have risen significantly, with a 14% increase in October 2024, impacting gross margin by at least 1% [34] - Advanced packaging is expected to grow faster than the corporate average, accounting for high single-digit revenue in 2024 [75] Q&A Session Summary Question: AI Demand and Semiconductor Cycle - Management believes AI demand is real and sustainable, driven by productivity gains and efficiency improvements [20][21] - The semiconductor cycle is expected to continue growing, with AI demand just beginning and expected to last for many years [24][25] Question: CapEx Growth - TSMC expects 2025 CapEx to be higher than 2024, driven by strong growth opportunities and healthy demand [28] Question: Gross Margin Outlook for 2025 - Factors impacting 2025 gross margin include reduced dilution from N3 ramp, higher electricity prices, and preparation costs for N2 [33][34] Question: Pricing Strategy and Antitrust Concerns - TSMC views its customers and suppliers as partners and does not see antitrust concerns due to its market share [44][45][48] Question: IDM Outsourcing Opportunities - TSMC is not interested in acquiring IDM fabs but continues to receive business from IDMs, including Intel [53] Question: Long-Term Growth Outlook - TSMC expects healthy growth over the next five years, driven by strong AI demand and advanced technologies [57][62] Question: Power Challenges and Nuclear Power - TSMC is working closely with the Taiwanese government to ensure sufficient electricity, water, and land for its fabs, but has not yet considered nuclear power [68] Question: PC and Mobile Demand - PC and smartphone demand is expected to grow at a low single-digit rate, with AI-related content driving silicon area growth [72] Question: Advanced Packaging Growth - Advanced packaging is expected to grow faster than the corporate average, with margins approaching but not yet at corporate levels [75] Question: Dividend Policy and Capital Allocation - TSMC's dividend policy is sustainable and steadily increasing, with a focus on organic growth and shareholder returns [78][79] Question: Foundry 2.0 Model - Advanced packaging and leading process nodes are expected to drive stronger growth within the Foundry 2.0 model [82] Question: Global Semiconductor Revenue Forecast - TSMC's forecast for global semiconductor revenue remains unchanged, with growth expected to be around 10% [86] Question: CoWoS Capacity Build - CoWoS capacity is being aggressively expanded, but customer demand still exceeds supply [91]

Taiwan Semiconductor Manufacturing Company just reported a 54% rise in third-quarter net profit.TSMC's growth was driven by strong demand for artificial intelligence technology.But the market is questioning whether the euphoria over AI and AI chips is sustainable. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a persona ...

In this articleAn image of a semiconductor wafer at the Taiwan Semiconductor Manufacturing Museum of Innovation in Hsinchu, Taiwan, on Jan. 11, 2022.Taiwan Semiconductor Manufacturing Company on Thursday reported a 54% hike in net profit, as global chipmakers continue to benefit from demand boosted by AI applications.The company's net income was 352.3 billion Taiwanese dollars ($10.1 billion) over the July-September quarter, surpassing an LSEG estimate of $300.2 billion Taiwanese dollars cited by Reuters.TS ...

Unleash Innovation Unleash Innovation 2024 Third Quarter Earnings Conference October 17, 2024 © 2024 TSMC, Ltd 0 TSMC Property Agenda • 3Q24 Financial Results and 4Q24 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 Unleash Innovation Safe Harbor Notice • TSMC's statements of its current expectations are forward-looking statements subject to significant risks and uncertainties and a ...

Financial Performance - TSMC reported Q3 2024 revenue of NT$759.69 billion (US$23.50 billion), a 39.0% YoY increase and a 12.8% QoQ increase[7][21] - Net income for Q3 2024 was NT$325.26 billion, a 54.2% YoY increase and a 31.2% QoQ increase[7][21] - Gross margin for Q3 2024 was 57.8%, operating margin was 47.5%, and net profit margin was 42.8%[7][21] - Net revenue in 3Q24 was NT$759.69 billion, a 12.8% increase from 2Q24 and a 39.0% increase from 3Q23[25] - Gross margin in 3Q24 was 57.8%, up 4.6 percentage points from 2Q24 and 3.5 percentage points from 3Q23[25][30] - Operating margin in 3Q24 was 47.5%, up 5.0 percentage points from 2Q24 and 5.8 percentage points from 3Q23[25][34] - Net income attributable to shareholders in 3Q24 was NT$325.26 billion, up 31.2% from 2Q24 and 54.2% from 3Q23[25][36] - Revenue for Q3 2024 reached $59.636 billion (NTD 1,886.781 billion), a 4.9% increase QoQ and a 43.8% increase YoY[51] - Net income for Q3 2024 was $8.876 billion (NTD 280.819 billion), up 12.5% QoQ and 17.2% YoY[51] - Operating income for Q3 2024 stood at $7.901 billion (NTD 249.974 billion), an 18.9% increase QoQ and 12.2% increase YoY[51] - Gross profit for Q3 2024 was $9.257 billion (NTD 292.884 billion), up 7.5% QoQ and 11.7% YoY[51] - Revenue for Q3 2024 reached $759.692 billion NTD, a 12.8% increase QoQ and a 39.0% increase YoY[53] - Net income for Q3 2024 was $304.024 billion NTD, representing a 16.4% increase QoQ and a 28.4% increase YoY[53] - Operating income for Q3 2024 stood at $360.766 billion NTD, a 25.9% increase QoQ and a 58.2% increase YoY[53] - Gross profit for Q3 2024 was $439.345 billion NTD, a 22.7% increase QoQ and a 48.1% increase YoY[53] - Diluted earnings per share (EPS) for Q3 2024 was $12.54 NTD, a 31.2% increase QoQ and a 54.2% increase YoY[53] - The company's comprehensive income for Q3 2024 was $325.080 billion NTD, a 31.3% increase QoQ and a 54.2% increase YoY[53] - Net revenue for the nine months ended September 30, 2024, was $63.199 billion (NTD 2,025,847 million), a 31.9% YoY increase from $1.536 billion (NTD 489,640 million) in the same period of 2023[55] - Gross profit for the nine months ended September 30, 2024, was $34.690 billion (NTD 1,111,975 million), representing a gross margin of 54.9%, up 31.9% YoY[55] - Net income for the nine months ended September 30, 2024, was $24.894 billion (NTD 797,963 million), a 33.1% YoY increase from $599.461 million (NTD 198,502 million) in 2023[55] - Earnings per share (diluted) for the nine months ended September 30, 2024, was $0.96 (NTD 30.80), a 33.1% YoY increase[55] Advanced Technologies and Revenue Breakdown - Advanced technologies (7nm and below) accounted for 69% of total wafer revenue in Q3 2024, with 3nm at 20%, 5nm at 32%, and 7nm at 17%[22] - 3nm process technology contributed 20% of total wafer revenue in 3Q24, up from 15% in 2Q24 and 6% in 3Q23[26][27] - High Performance Computing (HPC) accounted for 51% of net revenue in 3Q24, while Smartphone accounted for 34%[26][27] - Revenue from North America accounted for 71% of total net revenue in 3Q24, up from 65% in 2Q24[26][28] Cash Flow and Financial Position - Free cash flow for Q3 2024 was NT$184.91 billion, a 171.8% YoY increase and a 7.5% QoQ increase[16] - TSMC's cash and marketable securities increased to NT$2,167.60 billion in Q3 2024, representing 35.2% of total assets[14] - TSMC's total assets reached NT$6,165.66 billion in Q3 2024, a 12.4% YoY increase and a 3.1% QoQ increase[14] - Net working capital in 3Q24 was NT$1,693.51 billion, with a current ratio of 2.6x[37] - Net cash reserves increased by NT$121.41 billion to NT$1,172.63 billion in 3Q24, mainly due to a NT$118.96 billion increase in cash and marketable securities[41] - Cash generated from operating activities totaled NT$391.99 billion in 3Q24, including NT$384.91 billion from income before tax and NT$168.23 billion from depreciation & amortization[45] - Free cash flow increased by NT$12.92 billion to an inflow of NT$184.91 billion in 3Q24, mainly due to higher operating cash flow[46] - Current ratio improved to 2.6x in 3Q24, up from 2.5x in 2Q24 and 2.1x in 3Q23[42] - Net working capital increased to NT$1,693.51 billion in 3Q24, up from NT$1,542.74 billion in 2Q24[42] - TSMC's cash position increased by NT$87.65 billion to NT$1,886.78 billion at the end of 3Q24[45] - Total assets as of September 30, 2024, were $194.881 billion (NTD 6,165.658 billion), a 3.1% increase QoQ and 12.4% increase YoY[51] - Cash and cash equivalents as of September 30, 2024, were $34.149 billion (NTD 1,080.399 billion), up 3.0% QoQ and 11.4% YoY[51] - Total liabilities as of September 30, 2024, were $67.758 billion (NTD 2,143.736 billion), a 0.9% decrease QoQ but a 1.5% increase YoY[51] - Shareholders' equity as of September 30, 2024, was $127.123 billion (NTD 4,021.922 billion), up 5.3% QoQ and 19.2% YoY[51] - Net cash generated by operating activities for the nine months ended September 30, 2024, was $37.622 billion (NTD 1,205,972 million), a significant increase from $294.645 million (NTD 391,993 million) in 3Q 2023[57] - Cash and cash equivalents at the end of September 30, 2024, stood at $58.861 billion (NTD 1,886,781 million), up from $45.716 billion (NTD 1,465,428 million) at the beginning of the period[57] Capital Expenditures and Investments - Capital expenditures for TSMC totaled US$6.40 billion in 3Q24[47] - Capital expenditures for Q3 2024 totaled $19.539 billion (NTD 618.186 billion), a 2.0% decrease QoQ but an 18.3% increase YoY[51] - Acquisitions of property, plant, and equipment for the nine months ended September 30, 2024, totaled $18.532 billion (NTD 594,058 million), with $207.079 million (NTD 207,079 million) spent in 3Q 2024[57] - Net cash used in investing activities for the nine months ended September 30, 2024, was $17.249 billion (NTD 552,924 million), with $195.509 million (NTD 195,509 million) used in 3Q 2024[57] Dividends and Shareholder Returns - The company declared a cash dividend of NT$4.00 per share for Q2 2024, with an ex-dividend date of December 12, 2024[19] - TSMC's Board of Directors approved a NT$4.00 cash dividend for the second quarter of 2024[49] - Cash dividends paid for common stock for the nine months ended September 30, 2024, amounted to $8.090 billion (NTD 259,321 million), with $90.763 million (NTD 90,763 million) paid in 3Q 2024[57] Operational Metrics - TSMC's Q3 2024 shipment volume was 3,338K 12"-equivalent wafers, a 15.0% YoY increase and a 6.8% QoQ increase[7] - Days of inventory increased by 4 days to 87 days in 3Q24, primarily due to N3 and N5 wafer prebuild[40] - Weighted average outstanding shares - diluted for Q3 2024 was 25,928 million[53] Expenses and Tax - Total operating expenses in 3Q24 were NT$79.08 billion, accounting for 10.4% of net revenue[31][34] - Total non-operating items in 3Q24 were a gain of NT$23.42 billion, compared to a gain of NT$19.75 billion in 2Q24[32][35] - The company's operating expenses for Q3 2024 were $79.078 billion NTD, a 12.5% increase QoQ and a 15.1% increase YoY[53] - The company's effective tax rate for Q3 2024 was 7.8%, slightly lower than the previous quarter's 8.7%[53] - Research and development expenses for the nine months ended September 30, 2024, were $4.584 billion (NTD 146,950 million), an 11.4% YoY increase[55] - R&D expenses for Q3 2024 were $2.239 billion (NTD 70.820 billion), up 10.7% QoQ and 31.7% YoY[51] Partnerships and Strategic Initiatives - TSMC announced a partnership with Amkor to expand advanced packaging capabilities in Arizona[19] - TSMC and Amkor announced an expanded partnership to collaborate on advanced packaging in Arizona[49] Other Comprehensive Income and Losses - Other comprehensive income (losses) for Q3 2024 was a loss of $21.056 billion NTD, a significant decrease compared to the previous quarter and year[53]

Earnings season is bringing investors the most awaited stock market results, this time not only the banking sector’s status and trends but also the semiconductor and chipmaking niche of the technology sector. Last quarter, investors gathered around the country to watch earnings results from some of the biggest names in the space to decide whether to buy or sell.Taiwan Semiconductor Manufacturing TodayTSMTaiwan Semiconductor Manufacturing$188.94 +1.81 (+0.97%) 52-Week Range$84.95▼$194.25Dividend Yield1.04%P/ ...

Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is scheduled to report third-quarter 2024 results on Oct. 17.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Taiwan Semiconductor is likely to record yet another strong financial performance this time around, driven by rising investments in artificial intelligence (AI). With its advanced product portfolio, the company is likely to have capitalized on the demand for high-performance computing and smartphone applications.Click here ...