TSMC Expected to Achieve Record Profit in Q4 2023
Taiwan Semiconductor Manufacturing Company (TSMC), a premier global contract chipmaker and a pivotal supplier for major firms like Nvidia and Apple, is projected to declare a net profit of T$475.2 billion (approximately $15.02 billion) for the quarter ending December 31.
This estimation originates from an LSEG SmartEstimate derived from analyses conducted by 19 financial experts, as reported by News.Az, referencing Reuters.
SmartEstimates prioritize insights from analysts with a proven history of precision.
Market Dominance and Earnings Report
TSMC, which stands as Asia’s most valuable publicly traded enterprise with a market capitalization nearing $1.38 trillion—exceeding that of South Korea’s Samsung Electronics by a factor of two—is set to unveil its earnings this Thursday.
During this earnings call, scheduled for 0600 GMT, the company will also provide its guidance for both the upcoming first quarter and the entire year.
Revenue Surge in Q4
Last week, TSMC disclosed a robust 20.45% surge in fourth-quarter revenue, surpassing expectations. Any net profit exceeding T$452.3 billion will signify the company’s highest-ever quarterly earnings and its eighth consecutive quarter of profit advancement.
Strategic Factors Behind Revenue Growth
Galen Zeng, senior research manager at IDC, attributed the fourth-quarter revenue increase to the full utilization of TSMC’s 3-nanometre production capacity.
This surge was largely propelled by the launch of Apple’s iPhone 17 series, which employs the A19 chip alongside a sustained demand from the artificial intelligence sector.
Future Revenue Projections
Looking forward, IDC anticipates TSMC’s revenue growth to be between 25% and 30% in 2026, expressed in U.S. dollar terms, an upward revision from the earlier forecast of 22% to 26%.
This adjustment is due to the skyrocketing demand for AI server accelerators coupled with substantial contributions from the company’s forthcoming 2-nanometre production node.
“The principal catalyst is the meteoric rise of the AI server accelerator manufacturing market,” Zeng remarked, predicting a staggering year-on-year growth rate of 78% by 2026.
Market Share and Competitive Landscape
Shay Boloor, chief market strategist at Futurum Equities, noted the evident acceleration in AI demand, asserting TSMC’s continued advantage in the cutting-edge sector where its competitors face challenges in maintaining pace.
However, he cautioned that a swifter-than-anticipated establishment of overseas fabrication facilities could potentially dilute the profit margins expected from TSMC’s 2-nanometre node and the associated pricing strategies.
Investment Initiatives and Political Considerations
TSMC is committing $165 billion to the establishment of chip manufacturing plants in Arizona, USA. In a recent podcast, U.S. Secretary of Commerce Howard Lutnick indicated that the company is poised to further bolster its investments in the nation.
Currently in its pre-earnings quiet period, TSMC did not respond to a Reuters inquiry for comment.
Tariff Implications and Market Performance
The impact of U.S. President Donald Trump’s tariffs on TSMC remains uncertain. Taiwanese exports to the United States are subjected to a 20% tariff, although this does not encompass semiconductor chips.
In the preceding year, TSMC’s shares listed in Taipei experienced a remarkable gain of 44.2%, significantly outperforming the broader market, which rose by 25.7%.
Source link: News.az.
