TSMC to see revenue growth in Q2, beating street estimates; demand for AI chips surges

Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturer, today said its revenue for the second quarter ended June 30, 2024, will be in the range of $19.6 billion to $20.4 billion. The higher end of the revenue would result in a 30.1% year-on-year (YoY) growth.

According to a poll conducted by Reuters, TSMC’s revenue is expected to be $20.67 billion for Q2.

The company has seen a significant rise in its revenue as the demand for Artificial Intelligence (AI) applications skyrockets. The company’s customers include tech giants like Apple and Nvidia and the growing popularity of AI has helped the company achieve considerable growth.

In an earnings call in April, the company estimated that its gross margins would be in the range of 51.5% to 53.5% compared to 54.1% in the corresponding period last year. Meanwhile, the operating margin is expected to fall between 40%-42%, versus last year’s operating margin of 42%.

In the first quarter of the current year, TSMC reported an 8.9% YoY growth in its net income to $7.17 billion while the revenues for the quarter saw a growth of 16.5% YoY to $18.87 billion. The company’s operating income came in higher by 7.7% YoY to $7.93 billion.

The diluted earnings per share saw a growth of 8.9% YoY to $0.28.

Wendell Huang, senior vice president and chief financial officer of Taiwan Semiconductor Manufacturing Company, said that the first quarter was impacted by smartphone seasonality and the company’s performance will likely be offset in the upcoming quarter due to the continuation of the seasonality.

“Moving into the second quarter of 2024, we expect our business to be supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” he said.

Shares of the company have risen by nearly 76% since the beginning of the year. The stock has gained over 85% in the last one year.