Monday, July 15, 2024

With 9% Surge in First Quarter Profits, TSMC Surpasses Industry Estimates – Insights Success

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Taiwanese semiconductor manufacturer TSMC reported a 9% increase in net profit for the first quarter on Thursday, surpassing market expectations, driven by soaring demand for semiconductors utilized in artificial intelligence applications.

TSMC, the world’s largest contract chipmaker and a key supplier to companies like Apple Inc and Nvidia, has capitalized on the surge in AI adoption, enabling it to navigate the slowdown in pandemic-induced electronics demand and propel its stock to record levels.

In the January-March period, TSMC’s net profit climbed to T$225.5 billion ($6.98 billion) from T$206.9 billion a year ago. The profit exceeded the T$218.1 billion LSEG SmartEstimate, which is based on forecasts from analysts with a track record of accuracy.

As Asia’s most valuable listed company, TSMC reported a 13% year-on-year increase in first-quarter revenue to $18.87 billion, surpassing its earlier projection of $18 billion to $18.8 billion. Last week, the company announced first-quarter revenue in Taiwan dollars, amounting to T$592.64 billion.

TSMC disclosed that its capital expenditure in the first quarter amounted to $5.77 billion, compared to $5.24 billion in the fourth quarter of 2023. TSMC’s shares listed in Taipei have surged by 36% since the beginning of the year. On Thursday, the stock remained unchanged ahead of the results, contrasting with a 0.4% gain for the benchmark index.

The company is set to provide updates on its projections for the current quarter and the remainder of the year during an earnings call scheduled to commence at 0600 GMT. This includes information on capital expenditure, previously guided to be in the range of $28 billion to $32 billion for the year, compared to last year’s $30.45 billion.

On Wednesday, ASML, the largest supplier of equipment to computer chip manufacturers like TSMC, reported weaker-than-expected first-quarter new bookings. However, sales to China remained resilient despite restrictions led by the United States. (Conversion rate: $1 = 32.3190 Taiwan dollars)

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