Feed: AnandTech
Feed Link: https://www.anandtech.com
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Title: TSMCs Q2'24 Results: Best Quarter Ever as HPC Revenue Share Exceeds
52% on AI Demand

Date: Thu, 18 Jul 2024 13:00:00 EDT
Link: https://www.anandtech.com/show/21481/tsmcs-q2...

Taiwan Semiconductor Manufacturing Co. this week said its revenue for the
second quarter 2024 reached $20.82 billion, making it the company's best
quarter (at least in dollars) to date. TSMC's high-performance computing
(HPC) platform revenue share exceeded 52% for the first time in many years
due to demand for AI processors and rebound of the PC market.

TSMC earned $20.82 billion USD in revenue for the second quarter of 2024, a
32.8% year-over-year increase and a 10.3% increase from the previous quarter.
Perhaps more remarkable, $20.82 billion is a higher result than the company
posted Q3 2022 ($20.23 billion), the foundry's best quarter to date.
Otherwise, in terms of profitability, TSMC booked $7.59 billion in net income
for the quarter, for a gross margin of 53.2%. This is a decent bit off of
TSMC's record margin of 60.4% (Q3'22), and comes as the company is still in
the process of further ramping its N3 (3nm-class) fab lines.

When it comes to wafer revenue share, the company's N3 process technologies
(3nm-class) accounted for 15% of wafer revenue in Q2 (up from 9% in the
previous quarter), N5 production nodes (4nm and 5nm-classes) commanded 35% of
TSMC's earnings in the second quarter (down from 37% in Q1 2024), and N7
fabrication processes (6nm and 7nm-classes) accounted for 17% of the
foundry's wafer revenue in the second quarter of 2024 (down from 19% in Q1
2024). Advanced technologies all together (N3, N5, N7) accounted for 67% of
total wafer revenue.

"Our business in the second quarter was supported by strong demand for our
industry-leading 3nm and 5nm technologies, partially offset by continued
smartphone seasonality," said Wendell Huang, Senior VP and Chief Financial
Officer of TSMC. "Moving into third quarter 2024, we expect our business to
be supported by strong smartphone and AI-related demand for our leading-edge
process technologies."

TSMC usually starts ramping up production for Apple's fall products (e.g.
iPhone) in the second quarter of the year, so it is not surprising that
revenue share of N3 increased in Q2 of this year. Yet, keeping in mind that
TSMC's revenue in general increased by 10.3% QoQ, the company's shipments of
processors made on N5 and N7 nodes are showing resilience as demand for AI
and HPC processors is high across the industry.

Speaking of TSMC's HPC sales, HPC platform sales accounted for 52% of TSMC's
revenue for the first time in many years. The world's largest contract maker
of chips produces many types of chips that get placed under the HPC umbrella,
including AI processors, CPUs for client PCs, and system-on-chips (SoCs) for
consoles, just to name a few. Yet, in this case TSMC attributes demand for AI
processors as the main driver for its HPC success.

As for smartphone platform revenue, its share dropped to 33% as actual sales
declined by 1% quarter-over-quarter. All other segments grew by 5% to 20%.

For the third quarter of 2024, TSMC expects revenue between US$22.4 billion
and US$23.2 billion, with a gross profit margin of 53.5% to 55.5% and an
operating profit margin of 42.5% to 44.5%. The company's sales are projected
to be driven by strong demand for leading-edge process technologies as well
as increased demand for AI and smartphones-related applications.

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