TSMC demonstrated strong growth momentum in July 2024 amidst the slow recovery of the semiconductor market.
The growth is fueled by increased orders from major clients, such as Apple for its new iPhone, as well as Intel, Nvidia, Qualcomm, and MediaTek. TSMC's consolidated revenue for July reached approximately NT$256.95 billion (US$7.91 billion), marking a 23.6% increase from June and a significant 44.7% rise from the same period in 2023, setting a new monthly record.
Prospective growth
From January to July 2024, TSMC's cumulative revenue totaled approximately NT$1.52 trillion, reflecting a substantial 30.5% increase from the same period in 2023, also setting a record high for this timeframe.
TSMC's second-quarter performance exceeded financial forecasts. During the July earnings call, the company expressed confidence in continued strong demand for its advanced 5nm and 3nm process technologies, driven by mobile and AI-related opportunities.
TSMC projected third-quarter revenue to reach between US$22.4 billion and US$23.2 billion, representing a quarter-on-quarter growth of 7.58% to 11.43%. Assuming an exchange rate of US$1 to NT$32.5, this translates to an estimated NT$728 billion to NT$754 billion.
The company also forecasted a gross margin of 53.5% to 55.5% and an operating margin of 42.5% to 44.5%, with lower bounds exceeding the second quarter's gross margin of 53.2% and operating margin of 42.5%.
For the full year of 2024, TSMC expects the global semiconductor market (excluding memory) to grow by approximately 10%. Over the past three months, TSMC has observed stronger demand from customers for AI and high-end mobile devices, leading to increased capacity utilization for its 3nm and 5nm process technologies in the second half of 2024.
TSMC anticipates robust growth for the year and has raised its full-year revenue outlook.
In US dollar terms, TSMC forecasts revenue growth for 2024 to slightly exceed the mid-twenties percentage range (24-26%), returning to a growth trajectory and reaching new highs. Market optimism suggests that TSMC's full-year revenue in US dollars may outperform financial forecasts, potentially achieving a 30% year-over-year growth.
New plant incoming
Following its expansions in the US and Japan, TSMC plans to hold a groundbreaking ceremony for its new European Semiconductor Manufacturing Company (ESMC) plant in Dresden, Germany, on August 20. Construction is expected to begin by the end of 2024.
Additionally, TSMC addressed a recent patent infringement lawsuit filed against the company by Advanced Integrated Circuit Process LLC (AICP), a US-registered company, in the Eastern District of Texas. TSMC stated that it invests billions of dollars annually in independently developing industry-leading patent technologies (with US$5.8 billion invested in 2023 alone).
The company described the lawsuit as a typical case of "patent trolling" and confirmed that the matter is now in legal proceedings, with TSMC committed to defending its technology through the judicial process.
