TSMC's Q2 Profits Soar 36% on Strong AI Chip Demand

TAIPEI, Taiwan - Taiwan Semiconductor Manufacturing Co (TPE: 2330), the world's largest contract chipmaker, reported on Thursday a 40.1% year-on-year increase in second-quarter revenue, boosted by strong demand for advanced chips used in artificial intelligence applications.

Key financial highlights:

• Q2 revenue rose to NT$673.51 billion ($20.82 billion), up 13.6% from Q1
• Net income increased 36.3% year-on-year to NT$247.85 billion
• Gross margin was 53.2%, down 0.9 percentage points from a year earlier
• Operating margin improved to 42.5%, up 0.5 percentage points year-on-year

TSMC's advanced 3-nanometer process technology accounted for 15% of wafer revenue in Q2, while 5-nanometer and 7-nanometer processes contributed 35% and 17%, respectively.

The company's high-performance computing (HPC) platform represented 52% of net revenue, while smartphones accounted for 33%.

"Our second quarter business was supported by strong demand for our industry-leading 3nm and 5nm technologies," TSMC said in a statement.

The chipmaker's results come amid a global semiconductor shortage and increasing geopolitical tensions between China and the United States over advanced chip technology.

TSMC maintained its capital expenditure forecast 2024 at $32-36 billion. The company's shares have risen about 25% year-to-date, outperforming the broader market.

(US$ = NT$ 32.490)