TSMC beats expectations with bumper Q2 profits
The world's largest contract chip manufacturer, TSMC, has reported Q2 net profits of $7.60 billion – up from around £5 billion a year earlier.
The figures delivered a significant outstripping of analysts’ expectations, and were driven by the on-going demand from TSMC customers for advanced chips to power AI applications, largely powered by Nvidia accelerators.
As a result, TSMC has revised its projections for the current quarter. It now expects Q3 revenue to increase by as much as 34% to between USD 22.4 billion and USD 23.2 billion.
The headline numbers revealed by TSMC in its Q2 financials are as follows:
- Revenue up by 33% to USD 20.8 billion, up 32.8% year-over-year and 10.3% from the previous quarter
- Net profits of $7.60 billion – up from £5 billion in Q2 2023
- High-performance computing, led by AI, comprised 52% of TSMC’s revenue
- TSMC expects Q3 sales to be between USD 22.4 billion and USD 23.2 billion
- It expects operating margins to rise by 42.5% to 44.5% in the third quarter.
The company also revealed a break down of its sales by semiconductor type. Shipments of 3-nanometer accounted for 15% of total wafer revenue; 5-nanometer accounted for 35%; 7-nanometer accounted for 17%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 67% of total wafer revenue.
“Our business in the second quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” said Wendell Huang, Senior VP and Chief Financial Officer of TSMC in an official statement. “Moving into third quarter 2024, we expect our business to be supported by strong smartphone and AI-related demand for our leading-edge process technologies.”
