Taiwan Semiconductor Manufacturing Firm (TSMC), the world’s largest foundry (contract semiconductor producer), posted file efficiency final yr. On a quarterly foundation, it additionally surpassed one of the best quarterly efficiency set by Samsung Electronics in Q3 2018. Robust synthetic intelligence (AI) chip demand is interpreted as driving the earnings progress.
In response to Taiwan’s Central Information Company (CNA) on Jan. 15, TSMC’s income final yr elevated 31.6% year-over-year to three.809 trillion New Taiwan {dollars} (roughly 177.5 trillion gained). Income transformed to U.S. {dollars} exceeded $120 billion, breaking by means of $100 billion for the primary time in historical past. Internet revenue recorded 1.718 trillion New Taiwan {dollars} (roughly 80 trillion gained). CNA defined that “TSMC’s income and revenue final yr have been each file highs.”
This autumn income final yr was 1.046 trillion New Taiwan {dollars} (roughly 48.67 trillion gained), up 20.5% year-over-year, and internet revenue was 505.74 billion New Taiwan {dollars} (roughly 23.517 trillion gained), up 35%. Specifically, working revenue for a similar interval was 564.9 billion New Taiwan {dollars}, or $17.890 billion when transformed to U.S. {dollars}, surpassing Samsung Electronics’ quarterly most working revenue in U.S. greenback phrases ($16.1 billion) set in Q3 2018.
Final yr’s This autumn income breakdown by course of confirmed 3nm (nanometer) at 28%, 5nm at 35%, and 7nm at 14%, with superior processes of 7nm and under accounting for 77% of income, TSMC defined.
Reuters reported that TSMC achieved record-level efficiency that considerably exceeded market expectations due to the AI growth, stating that “threats by the Donald Trump U.S. administration’s commerce insurance policies and tariffs on semiconductors have created a lot uncertainty for the worldwide chip business, however this uncertainty has not but severely impacted the surging earnings pushed by the AI growth.” Bloomberg additionally evaluated that TSMC’s robust efficiency helps optimistic forecasts by U.S. chip design corporations concerning AI {hardware} demand, noting that “TSMC, together with its prime buyer Nvidia, has expressed robust confidence in AI demand that may drive long-term progress, regardless of rising issues concerning the sustainability of capital expenditures.”
TSMC expressed optimism about persevering with income progress momentum in Q1 this yr whereas saying plans to considerably enhance capital expenditures.
TSMC projected throughout a convention name that day that Q1 income would attain $34.6-35.8 billion (roughly 50.9-52.6 trillion gained) pushed by the worldwide AI growth, representing quarter-over-quarter progress of as much as 4%. This represents as much as 40% progress in comparison with the identical interval final yr. The corporate additionally forecasted that whole income in U.S. {dollars} this yr would enhance by roughly 30% in comparison with final yr.
This yr’s capital expenditures are projected at $52-56 billion (roughly 76.5-82.4 trillion gained), a rise of 27-37% from final yr’s $40.9 billion (roughly 60.2 trillion gained). This represents TSMC’s highest stage ever.
Wendell Huang, TSMC’s chief monetary officer (CFO), mentioned that 60-80% of capital expenditure can be allotted to superior processes and 10% to specialty processes. He additionally acknowledged that 10-20% can be used for superior packaging, testing, and photomask manufacturing.
TSMC Chairman C.C. Wei projected that mass manufacturing may start on the firm’s second U.S. manufacturing unit across the second half of 2027, in keeping with Germany’s dpa information company and others. He defined {that a} third manufacturing unit is underneath development in Arizona, and allowing work is underway for a fourth manufacturing unit and the primary superior packaging facility. He additionally revealed that further land has been bought in Arizona for manufacturing unit enlargement. He acknowledged, “We are going to broaden many factories there, and thru this mega manufacturing facility complicated, we will enhance productiveness, cut back prices, and higher serve clients in the USA.”
In the meantime, TSMC declined to remark concerning interpretations that mutual tariff negotiations between the USA and Taiwan are making progress, as the corporate has dedicated to increasing 5 semiconductor factories in Arizona.
