TSMC posts record profits on continued AI demand

Taiwan Semiconductor Manufacturing Company on Thursday reported a 58% increase in first-quarter profit, beating estimates and hitting a fresh record as demand for artificial intelligence chips stayed strong.

Here are the company’s results versus LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:

• Revenue: 1,134 billion new Taiwan dollars ($35 billion), vs. NT$1.127 trillion expected
• Net income: NT$572.48 billion, vs. NT$543.32 billion 

TSMC’s net income for the three months ended in March represents a fourth consecutive quarter of record profits. 

The company’s revenue rose to NT$1.134 billion, beating estimates. It had first reported the 35% year-on-year rise in first-quarter revenue last week.

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

The chip giant has also benefited greatly from the proliferation of AI, producing advanced processors designed by the likes of Nvidia — now the company’s largest customer — and AMD. 

The company said advanced chips, with sizes 7-nanometer or smaller, accounted for about 74% of TSMC’s total wafer revenue in the quarter. 

In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency.

TSMC’s shipments of its most advanced 3-nanometer chips accounted for 25% of total wafer revenue. 

At its last earnings call in ​January, the company said it expected its capital spending this year to rise as much as 37% to between $52 billion ​and $56 billion, ⁠reflecting an expectation that demand will continue to grow.