Taiwan Semiconductor Manufacturing Firm on Thursday beat income and revenue expectations within the first quarter, due to continued robust demand for superior chips, significantly these utilized in AI functions.

Listed here are TSMC’s first-quarter outcomes versus LSEG consensus estimates:

• Web income: 592.64 billion New Taiwan {dollars} ($18.87 billion), vs. NT$582.94 billion anticipated
• Web earnings: NT$225.49 billion, vs. NT$213.59 billion anticipated

TSMC reported web income rose 16.5% from a yr in the past to NT$592.64 billion, whereas web earnings elevated 8.8% from a yr in the past to NT$225.49 billion. The agency guided first-quarter income to be between $18 billion and $18.8 billion.

TSMC is the world’s largest producer of superior processors and counts corporations reminiscent of Nvidia and Apple as its purchasers.

“TSMC is well-positioned for robust efficiency primarily based on key trade tendencies. The continued demand for superior chips, significantly these utilized in AI functions, is a optimistic signal for each the quick and long run. The deal with superior chip improvement, just like the shift in the direction of 3nm know-how, is one other issue driving long-term progress for TSMC,” Brady Wang, affiliate director at Counterpoint Analysis, mentioned on Monday forward of the outcomes.

TSMC at the moment produces 3-nanometer chips and plans to begin mass manufacturing of 2-nanometer chips in 2025. Usually, a smaller nanometer dimension yields extra highly effective and environment friendly chips. 

Robust demand for AI chips led by the proliferation of huge language fashions reminiscent of ChatGPT and Chinese language clones has prompted TSMC’s shares to surge 56% up to now one yr.

TSMC accounted for 61% of world foundry income within the fourth quarter, in line with Counterpoint Analysis information. Samsung Foundry got here in second with 14% of the market.

“TSMC’s web revenue margin continues to be one of many highest within the firm’s historical past at 40%, in opposition to an trade common of 14%, demonstrating TSMC’s robust aggressive place. The excessive margin is the results of an elevated share of gross sales of 7nm and smaller chips, which have considerably increased margins,” Grzegorz Drozdz, market analyst at Conotoxia, mentioned final week.

The U.S. additionally just lately granted TSMC’s Arizona subsidiary preliminary approval for presidency funding value as much as $6.6 billion to construct the world’s most superior semiconductors. TSMC can also be eligible for about $5 billion in proposed loans.

Earlier this month, Taiwan was hit by an earthquake – its strongest one in 25 years. A TSMC spokesperson mentioned its development websites had been regular upon preliminary inspection, although employees from some fabs had been briefly evacuated. These employees subsequently returned to their workplaces.

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