In the recent financial report for the second quarter of 2024, Taiwan Semiconductor Manufacturing Co. (TSMC) showcased impressive numbers that highlight its strong market position and the increasing demand for its advanced chip technologies. TSMC is currently ranked as the 9th most valuable company globally, with a market cap of $836.35 billion, and briefly exceeded $1 trillion recently, putting it in 8th place.
The company reported net sales of NT$673.51 billion (US$20.88 billion), showing a 40.1% increase from the previous year. Gross profit also saw a significant rise, reaching NT$358.13 billion (US$11.10 billion), up 37.6% year-over-year. Operational income followed a similar upward trend, with a 41.9% increase compared to the previous year. Net income demonstrated solid growth, with a 36.3% increase.
Despite the healthy profits, a price hike seems to be on the horizon. During a call with analysts, Dr. C.C. Wei, TSMC’s Chairman and CEO, mentioned the challenges the company faces, such as rising costs due to process complexity, higher electricity costs, and global inflation. This could lead to an increase in prices.
There have been speculations about TSMC potentially acquiring Arm, leading to the company expanding its role beyond being a foundry service provider. While there is no confirmation of this happening, it could be a strategic move for TSMC in the future.
Looking ahead to the third quarter of 2024, TSMC expects revenues between US$22.4 billion and US$23.2 billion, with gross profit margins ranging from 53.5% to 55.5%. Operating profit margins are anticipated to be between 42.5% and 44.5%. However, profits might see a slight decline as TSMC is investing in new nanometer processes for future products.
In other news, TSMC has teamed up with SK Hynix to advance HBM development, showing the company’s commitment to innovation and collaboration in the industry. Additionally, TSMC remains prepared to respond to any geopolitical challenges, as seen in the case of Taiwan chip companies potentially halting manufacturing if Chinese troops show up.
As TSMC continues to push boundaries in chip technology and maintain its position as a key player in the industry, the future looks promising for the company and its stakeholders. The potential acquisition of Arm and ongoing investments in advanced processes signal TSMC’s readiness to adapt and evolve in the ever-changing semiconductor landscape.
