TSMC(TSM) - 2024 Q3 - Quarterly Results

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]