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TSMC’s Q4 2023 Earnings Reflect Robust Quarter-on-Quarter Growth Amid Yearly Declines

Despite a yearly drop in net income and EPS, TSMC reports strong quarter-on-quarter revenue and income increases, with optimistic projections for 2024
Taiwan
t 2330.TW Tech 350 Blue Chip 150 Semicon 75
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Taiwan Semiconductor Manufacturing Company (TSMC) has released its financial results for the fourth quarter of 2023, displaying a mixed performance with steady quarter-on-quarter growth but a year-over-year decline. The company reported consolidated revenue of NT$625.53 billion and net income of NT$238.71 billion, with diluted earnings per share (EPS) of NT$9.21 (US$1.44 per ADR unit). Compared to the same period last year, these figures represent a flat revenue performance and a 19.3% decrease in net income and diluted EPS.

However, TSMC’s quarter-on-quarter metrics show a robust increase, with a 14.4% rise in revenue and a 13.1% growth in net income compared to Q3 2023. In US dollars, the Q4 revenue reached $19.62 billion, a 1.5% decrease year-over-year but a significant 13.6% increase from the previous quarter. The company’s key financial margins include a gross margin of 53.0%, an operating margin of 41.6%, and a net profit margin of 38.2%.

TSMC’s commitment to advanced semiconductor technologies is evident in its Q4 shipments. The 3-nanometer shipments accounted for 15% of total wafer revenue, with 5-nanometer and 7-nanometer processes contributing 35% and 17%, respectively. Collectively, advanced technologies (7-nanometer and beyond) made up 67% of the total wafer revenue.

Looking ahead to 2024, TSMC anticipates a 6.2% quarter-on-quarter revenue decline in Q1 but remains optimistic about its growth prospects throughout the year. The company projects a full-year revenue growth of 21% to 26%, surpassing the industry average. The demand for high-performance computing is expected to remain strong, balancing the seasonal smartphone industry fluctuations. TSMC’s CFO, Wendell Huang, estimates Q1 2024 revenue to be between $18 billion and $18.8 billion, with a gross margin of 52% to 54%.

President CC Wei highlighted the significant role of TSMC’s leading process technology in its growth trajectory. The company’s 3-nanometer manufacturing process, which began mass production in the second half of 2023, is expected to contribute increasingly to the revenue, driven by the demands in smartphone and high-performance computing sectors.

TSMC’s capital expenditure for 2023 totaled $30.45 billion, a 16.1% decrease from 2022. The projected capital expenditure for 2024 is estimated to be between $28 billion and $32 billion, aligning with the company’s strategic growth plans and industry-leading position in semiconductor manufacturing.

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