TSMC expects to post revenues of between US$25 billion and US$25.8 billion in the first quarter of 2025, representing a decrease of 5.5% from the previous quarter at the midpoint. Gross margin and operating margin for the quarter are estimated at 57-59% and 46.5-48.5%, respectively.
TSMC has also set a capex target of US$38-42 billion for 2025, with 70% allocated to advanced technology production, 10-20% to specialty processes, and 10-20% to advanced packaging, testing, mask manufacturing, and others. The company spent US$29.76 billion in capex in 2024.
Strong fourth quarter and 2024 performance
TSMC reported net profits grew 15.2% from the previous quarter and a robust 57% compared to the same period last year to NT$374.68 billion (US$5.1 billion) in the fourth quarter of 2024. EPS for the quarter came to NT$14.45, or US$2.24 per ADR unit.
TSMC posted net sales of NT$868.46 billion for the fourth quarter, up 14.3% from the previous quarter and 38.8% compared to the same period in 2024. Gross margin arrived at 59% compared with 57.8% in the prior quarter and 53% a year earlier, while operating margin grew 1.5% quarter over quarter and 7.4% year over year to 49%.
In US dollars, TSMC's fourth-quarter revenue came to US$26.88 billion, which reached the upper hand of its guidance given in mid-October. Gross margin also met the top end of the guidance, while operating margin slightly exceeded expectations.
TSMC credited its positive performance during the fourth quarter to robust 3nm and 5nm chip demand.
TSMC reported revenue of NT$2.89 trillion in 2024, representing a 33.9% rise compared to 2023. In US dollars, net revenue rose 30.0% to US$90.08 billion in 2024. Gross margin for the year came to 56.1%, up 1.7% from 54.4% in 2023, while operating margin increased 3.1% year over year to 45.7%. Diluted EPS for 2024 arrived at NT$45.25, up 39.9% from NT$32.34 in 2023.
Advanced chips dominate revenue stream
TSMC disclosed that 3nm chip shipments accounted for 26% of total wafer revenue in the fourth quarter of 2024, while shipments of 5nm and 7nm chips accounted for 34% and 14%, respectively, of revenue. Advanced technologies, defined as 7nm and more advanced technologies, accounted for 74% of TSMC's total wafer revenue in the fourth quarter.
In the fourth quarter, revenue from orders for HPC devices accounted for 53% of revenue, up from 51% in the prior quarter and 43% during the same period in 2023. Revenue from smartphone chip orders declined 8% compared to the previous year to 35% in the fourth quarter of 2024. The IoT, automotive, digital consumer electronics, and other segments each represented 5%, 4%, 1% and 2%.
North America remained the largest market of TSMC in the fourth quarter of 2024, accounting for 75% of total wafer revenue, while revenue from China, Asia Pacific, Japan, and EMEA (Europe, Middle East, and Africa) accounted for 9%, 9%, 4% and 3% of revenue, respectively.
In full-year 2024, TSMC saw sales generated from 3nm process technology account for 18% of total wafer revenue, while 5nm and 7nm process technology contributed 34% and 17%, respectively. Advanced technologies accounted for 69% of TSMC's total wafer revenue, up from 58% in 2023.
By platform, TSMC's revenue from HPC, smartphone, IoT, automotive and DCE chip sales increased 58%, 23%, 2%, 4%, and 2%, respectively, compared to 2023. Overall, HPC chip sales accounted for 51% of total wafer revenue in 2024, up from 43% in 2023, while the smartphone segments decreased to 35% of revenue from 38%.
In 2024, TSMC's revenue from customers based in North America accounted for 70% of total net revenue, while revenue from China, Asia Pacific, Japan, and EMEA accounted for 11%, 10%, 5%, and 4% of total net revenue respectively.