Web Stories Tuesday, February 27

TAIPEI: Taiwanese chipmaker TSMC projected on Thursday (Jan 18) steady capital spending for the current year and upwards of 20 per cent revenue growth driven by demand for artificial intelligence.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker and a major Apple Inc and Nvidia supplier, also reported a quarterly net profit that beat market expectations.

Looking ahead, TSMC said it plans to expand its global manufacturing footprint, with construction at its fab plant in Germany expected to begin in the fourth quarter of this year. It forecast capital spending at US$28-US$32 billion for this year, in line with 2023.

TSMC posted a 19 per cent drop in net profit for the October-December quarter to NT$238.7 billion (US$7.6 billion) from a particularly strong year-ago quarter as global economic woes hit demand for chips used in applications from cars to cellphones and servers.

The profit, though, beat a NT$226.4 billion LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.

“Our fourth quarter business was supported by the continued strong ramp of our industry-leading 3-nanometre technology,” said Wendell Huang, chief financial officer of TSMC.

He said the current quarter would be impacted by seasonality of the smartphone business, which would be partially offset by strength in its high-performance computing segment that includes AI chips.

TSMC, Asia’s most valuable listed company, said fourth-quarter revenue slipped 1.5 per cent year-on-year to US$19.62 billion, in line with the company’s previous forecast of US$18.8 billion to US$19.6 billion.

Capital expenditure in the fourth quarter was US$5.24 billion, TSMC said, compared with US$7.1 billion in the third quarter.

For the full year, capital expenditure came in at US$30.45 billion, less than a prior forecast of US$32 billion for 2023 and compared with a total of US$36.29 billion spent in 2022.

As the biggest maker of advanced chips, TSMC must navigate an uncertain industry outlook and a US-China chip spat that could make it vulnerable.

While the company said 2023 was challenging, it forecast healthy growth for this year, adding that it expects inventories to return to a healthy level.

Revenue for 2024 should increase in the low to mid-20 per cent range in US dollar terms, it said.

TSMC’s Taipei-listed shares surged 32 per cent last year. The stock rose 1.2 per cent on Thursday ahead of the results versus a 0.4 per cent gain for the benchmark index, giving the company a market value of US$478.3 billion.


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