tsmc's earnings report set to reveal crucial insights

2024-12-05 tsmc

Hsinchu, Thursday, 5 December 2024.
Taiwan’s leading chip manufacturer, TSMC, is set to announce its quarterly earnings on January 22, 2025. This report is highly anticipated by investors, as it will shed light on the company’s performance amidst a volatile semiconductor market. TSMC has consistently surpassed earnings expectations, with a Q3 2024 EPS of $1.94, beating estimates by $0.20. The upcoming earnings will provide updates on strategic initiatives, including capacity expansion and key client relations, notably with tech giants like Apple and Nvidia. TSMC, which holds over 60% market share in contract semiconductor manufacturing, has seen a significant stock price increase driven by AI infrastructure demand. The company plans to raise prices for AI semiconductors by up to 10% in 2025. The earnings report will be crucial in understanding how TSMC navigates these market dynamics and its future growth trajectory.

Strong financial performance and market dominance

TSMC’s market position remains robust, with Q3 2024 revenue reaching $23.50 billion [1]. The company’s CFO Wendell Huang attributed this success to strong demand in smartphone and AI sectors, particularly for their advanced 3-nanometer and 5-nanometer technologies [4]. TSMC’s financial outlook appears promising, with analysts projecting earnings growth of 32% for 2024 and 30% for 2025 [4]. The company’s gross margin has shown remarkable improvement, rising by 460 basis points to 57.8% [3].

Strategic technological advances

TSMC has secured its technological leadership by fully booking its new 2nm technology for Apple’s next-generation chips [3][5]. The company is simultaneously ramping up its 3nm technology production [3]. This technological advancement comes as competitors face challenges, with Intel’s foundry business experiencing losses and Samsung encountering operational issues [3]. TSMC’s strategic positioning has earned it a impressive Composite Rating of 95 out of 99 from Investor’s Business Daily [4].

Future outlook and pricing strategy

Looking ahead to 2025, TSMC has announced plans to increase prices by up to 10% for AI semiconductors and chip-on-wafer-on-substrate products [3][5]. The company’s Q4 2024 revenue is projected to range between $26.1 billion and $26.9 billion, surpassing Wall Street’s estimate of $24.9 billion [4]. TSMC expects to triple its AI revenue in 2024, potentially reaching $13 billion [4]. These projections reflect the company’s strong market position and pricing power in the semiconductor industry.

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Earnings report Capacity expansion