TSMC beats forecasts with strong Q2 revenue driven by AI demand

Taiwan Semiconductor Manufacturing Company (TSMC) exceeded analyst expectations by posting robust second-quarter revenue growth driven by booming demand for artificial intelligence (AI) applications.

TSMC, whose clients include tech giants like Apple and Nvidia, has capitalised on the surge in AI, helping it navigate a slowdown in pandemic-driven chip demand and propel its share price to record highs.

TSMC’s revenue for the April-June period reached T$673.51 billion ($20.67 billion), according to Reuters calculations. This handily surpassed the LSEG SmartEstimate of T$654.27 billion, according to data compiled from forecasts of 21 analysts.

The figure shows a notable 32 per cent year-over-year increase from $15.68 billion in the same quarter of 2023. TSMC reports monthly revenue in Taiwan dollars and quarterly figures in US dollars during earnings calls.

In June, TSMC exceeded its internal forecasts with a strong performance, reporting a 33 per cent year-on-year revenue surge to T$207.87 billion. However, the company did not provide specific details on product segments or profit margins in its brief revenue statement.

Investors are eagerly awaiting further information and future guidance from TSMC, which is currently Asia’s most valuable publicly listed company with a market capitalization of $830 billion.

Investors will need to wait until July 18th for TSMC’s full second-quarter earnings report, which will provide a detailed financial breakdown and updated guidance. Analysts expect a 30 per cent year-on-year increase in TSMC’s second-quarter net profit.

TSMC’s stock on the Taiwan Stock Exchange closed up 0.5 per cent on Wednesday, aligning with the broader market index. The shares are currently trading at historic highs, up 76 per cent this year compared to the market’s 34 per cent increase.

TSMC’s ADRs surged 4.8 per cent to a record $192.79 on Monday, briefly pushing the company’s market value towards $1 trillion.

Attribution: Reuters