TSMC posts record profits on continued AI demand

Taiwan Semiconductor Manufacturing Company on Thursday reported a 58% jump in first-quarter profit, beating forecasts and setting a new record, as demand for AI chips remained strong.

Here are the company’s results against LSEG SmartEstimates, weighted by analysts’ estimates, which are more consistently accurate:

• Revenue: NT$1.134 trillion ($35 billion), versus NT$1.127 trillion expected
• Net income: NT$572.48 billion versus NT$543.32 billion

TSMC’s net income of NT$572.48 billion in the three months ended March marked the fourth consecutive quarter of record profits.

Meanwhile, the company’s revenue exceeded forecasts, rising to NT$1.134 trillion. The company first reported a 35% year-over-year increase in first-quarter revenue last week.

TSMC, Asia’s largest technology company by market capitalization, has maintained sustained demand for advanced semiconductors from key customers such as Apple, even as concerns remain about supply chain disruptions from conflict in the Middle East and its potential impact on demand.

During the earnings call, TSMC executives said the company does not expect any short-term impact on its operations due to recent disruptions in global energy supply.

The company also said it will add an advanced chip manufacturing facility in Tainan, Taiwan, as it tries to meet strong demand.

TSMC makes chips for everything from consumer electronics to data centers and is making advanced processors designed by its peers, benefiting greatly from the proliferation of artificial intelligence. Nvidia — now the company’s largest customer — and AMD.

TSMCs high performance computing The division that includes Artificial Intelligence and 5G applications accounted for the majority of sales in the first quarter, rising to 61% of revenue.

Meanwhile, advanced chips with sizes of 7 nanometers or less accounted for about 74% of TSMC’s total wafer revenue in the quarter, the company said. TSMC’s sub-3 nanometer advanced chip shipments accounted for 25% of total wafer revenue.

In semiconductor technology, smaller nanometer sizes imply more compact transistor designs, resulting in greater processing power and efficiency.

In its last earnings call in January, the company said it expected capital spending this year to rise as much as 37% to between $52 billion and $56 billion; This reflects the expectation that demand will continue to increase. The company on Thursday said it expects capex to be at the high end of that range.