Group 1 - Taiwan Semiconductor Manufacturing (TSMC) reported better-than-expected earnings for its third fiscal quarter, positively impacting the entire chip sector [1] - The earnings report highlighted significant growth in earnings and free cash flow for TSMC [1]

Taiwan Semiconductor Manufacturing Company (TSM) reported a 54% hike in net profit on Thursday, 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, as quoted on CNBC. The stock gained 9.8% on Oct. 17, 2024. Find the latest EPS estimates and surprises on Zacks Earnings Calendar. The firm's t ...

Uttam is a growth-oriented investment analyst whose equity research primarily focuses on the technology sector. Semiconductors, Artificial Intelligence and Cloud software are some of the key sectors that are regularly researched and published by him. His research also focuses on other areas such as MedTech, Defense Tech, and Renewable Energy. In addition, Uttam also authors The Pragmatic Optimist Newsletter along with his wife, Amrita Roy, who is also an author on the newsletter as well as on this platform. ...

Investment Rating - The report maintains an "Overweight" rating for TSMC (TSM N) with a target price of $238 [2][14] Core Views - TSMC's Q3 2024 gross margin significantly exceeded expectations at 57 8% (up 3 5 pct YoY and 4 6 pct QoQ) driven by improved capacity utilization and cost reduction measures [3][8] - AI demand is confirmed with strong growth in advanced nodes (3nm and 2nm) and CoWoS capacity expansion [3][14] - The competitive landscape in the foundry industry is shifting in favor of TSMC as competitors face challenges in advanced node development [3][14] Financial Performance - Q3 2024 revenue reached $23 5 billion (up 36% YoY and 12 9% QoQ) surpassing consensus estimates of $23 35 billion [8] - Adjusted net profit for Q3 2024 was NT$325 26 billion (up 54 2% YoY and 31 2% QoQ) exceeding consensus estimates of NT$298 74 billion [8] - Advanced nodes (≤7nm) accounted for 69% of revenue in Q3 2024 (up 10 pct YoY and 2 pct QoQ) with 3nm contributing 20% (up 14 pct YoY and 5 pct QoQ) [10] Revenue Breakdown - By application: HPC accounted for 51% of revenue (up 9 pct YoY) while smartphones contributed 34% (down 5 pct YoY) [11] - By region: North America represented 71% of revenue (up 2 pct YoY) while China accounted for 11% (down 1 pct YoY) [11] Capacity Expansion - CoWoS capacity is expected to double in 2025 following a 2x increase in 2024 [3] - Overseas fab progress is accelerating with Arizona fabs expected to start production in early 2025 2028 and 2030 while Japan and Germany fabs are scheduled for 2024 Q4 and 2027 respectively [3] Valuation and Forecast - Revenue forecasts for FY2024E-FY2026E are revised upward to NT$28 858 billion NT$37 517 billion and NT$43 758 billion respectively [3] - GAAP net profit forecasts for FY2024E-FY2026E are raised to NT$11 844 billion NT$16 757 billion and NT$19 916 billion respectively [3] - The target price is increased to $238 based on DCF valuation maintaining the "Overweight" rating [14]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [3]. Core Insights - The company reported Q3 2024 revenue of $23.50 billion, a year-on-year increase of 36.0% and a quarter-on-quarter increase of 12.9%, exceeding previous guidance [1]. - Gross margin for Q3 2024 was 57.8%, up 3.5 percentage points year-on-year and 4.6 percentage points quarter-on-quarter, also surpassing prior guidance [1]. - Net profit for Q3 2024 reached $10.058 billion, reflecting a year-on-year growth of 51.0% and a quarter-on-quarter growth of 31.4% [1]. - The company has raised its full-year revenue growth guidance from slightly over 25% to nearly 30% [1]. Performance Summary - For Q4 2024, the company expects revenue between $26.1 billion and $26.9 billion, with a midpoint year-on-year growth of 35.1% and a quarter-on-quarter growth of 12.7% [1]. - The projected gross margin for Q4 2024 is between 57.0% and 59.0% [1]. - The company anticipates full-year capital expenditures to exceed $30 billion [1]. Operational Analysis - The improvement in gross margin is attributed to increased utilization rates and cost optimization [2]. - The revenue distribution for advanced process nodes in Q3 2024 was 20% for 3nm, 32% for 5nm, and 17% for 7nm, with 69% of revenue coming from 7nm and more advanced nodes [2]. - Major downstream applications include High-Performance Computing (HPC) and smartphones, with Q3 2024 revenue contributions of 51% from HPC and 34% from smartphones [2]. - The company expects low single-digit growth in PCs and smartphones, but anticipates that AI-related demand will drive higher wafer consumption growth [2]. Profit Forecast and Valuation - Revenue projections for 2024 to 2026 are $89.21 billion, $115.35 billion, and $134.77 billion, respectively, with net profits of $36.11 billion, $48.87 billion, and $58.27 billion [5]. - The company is expected to benefit from an improved competitive landscape in the advanced process foundry industry and increased demand for advanced processes [3].

More than 15 years of professional investment experience in global equities across all sectors. My investment style is fundamental, bottom-up, long-term, and quality growth-oriented. I am seeking companies specializing in niche markets, with strong growth potential, a solid management team, a sound capital allocation policy, and, most importantly, reasonable valuation. I do not chase quarterly results, nor do I follow the herd mentality. I do not use short-term stock performance as the measure of a company' ...

Tired of losing money? Our Tech Contrarians team of Wall Street analysts sifts through the noise in the tech industry and captures outperformers through a coveted research process. We let the work speak for itself here .Taiwan Semiconductor Manufacturing Company Limited aka TSMC (NYSE: TSM ) is among our top three picks in our semi-coverage universe, and Thursday morning's Q3 earnings results and outlook confirm our positive thesis is well-placed for nextAnalyst’s Disclosure: I/we have no stock, option or s ...

Taiwan Semiconductor ((TSM) reported quarterly earnings this morning and did not disappoint shareholders. Earnings came in 8.9% above analysts' expectations and showed a 54.2% year-over-year (YoY) increase, while revenue beat estimates by 1.3% and grew an impressive 39% YoY.Management offered encouraging comments as well, with Wendell Huang, Senior VP and Chief Financial Officer saying, “Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm a ...

Key TakeawaysNvidia shares set yet another record high Thursday as concerns earlier this week about a softening in the semiconductor market was eased by TSMC's earnings report.The Taiwanese supplier of chips to Nvidia, Apple, and others reported a huge jump in profit and sales on AI chip demand, and predicted a continuation of that demand in the future.Also boosting Nvidia's stock were comments by billionaire Stanley Druckenmiller that he lamented selling all his shares of the company earlier this year. Sha ...

The foundry giant served up convincing evidence that the artificial intelligence (AI) revolution is far from over.Shares of Taiwan Semiconductor Manufacturing Company (TSM 10.68%), also known as TSMC, charged as much as 13.4% higher on Thursday. As of 2:13 p.m. ET, the stock was still up 11.4%.Driving the semiconductor specialist higher were its quarterly financial results, which came in ahead of expectations.AI continues to chug alongAfter the blistering share price rally that kicked off early last year, m ...