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Taiwan Semiconductor Manufacturing Co. announced this week that its revenue for the second quarter of 2024 reached $20.82 billion, marking the company’s best quarter to date in terms of dollars. The high-performance computing (HPC) platform’s revenue share surpassed 52% for the first time in many years, driven by demand for AI processors and a rebound in the PC market.
TSMC earned $20.82 billion USD in revenue for the second quarter of 2024, a 32.8% year-over-year increase and a 10.3% rise from the previous quarter. Notably, this result surpasses the company’s previous record of $20.23 billion in Q3 2022 ($20.23 billion). In terms of profitability, TSMC posted $7.59 billion in net income for the quarter, with a gross margin of 53.2%. Although this is lower than TSMC’s record margin of 60.4% in Q3 2022, it comes as the company is still ramping up its N3 (3nm-class) fab lines.
Regarding wafer revenue share, the N3 process technologies (3nm-class) accounted for 15% of wafer revenue in Q2, up from 9% in the previous quarter. N5 production nodes (4nm and 5nm-classes) contributed 35% of TSMC’s earnings in the second quarter, down from 37% in Q1 2024. N7 fabrication processes (6nm and 7nm-classes) accounted for 17% of the foundry’s wafer revenue in Q2 2024, down from 19% in Q1 2024. Altogether, advanced technologies (N3, N5, N7) made up 67% of total wafer revenue.
“Our business in the second quarter was buoyed by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” said Wendell Huang, Senior VP and Chief Financial Officer of TSMC. “Entering the third quarter of 2024, we anticipate our business will be supported by strong smartphone and AI-related demand for our cutting-edge process technologies.”
TSMC typically ramps up production for Apple’s fall products, like the iPhone, in the second quarter, so it is not surprising that the revenue share of N3 increased in Q2 of this year. Considering the overall 10.3% QoQ increase in TSMC’s revenue, the company’s shipments of processors made on N5 and N7 nodes have shown resilience, given the high industry demand for AI and HPC processors.
TSMC’s HPC platform sales accounted for 52% of the company’s revenue for the first time in many years. The world’s largest contract maker of chips produces a variety of semiconductors that fall under the HPC umbrella, including AI processors, CPUs for client PCs, and system-on-chips (SoCs) for consoles. In this case, TSMC attributes the increased demand for AI processors as the primary driver of its HPC success.
In contrast, the revenue share for the smartphone platform dropped to 33% due to a 1% decline in actual sales quarter-over-quarter. Other segments saw growth ranging from 5% to 20%.
For the third quarter of 2024, TSMC forecasts revenue between $22.4 billion and $23.2 billion, with a gross profit margin of 53.5% to 55.5% and an operating profit margin of 42.5% to 44.5%. The company’s sales are expected to be propelled by strong demand for leading-edge process technologies and increased demand for AI and smartphone-related applications.
