TSMC not only posted very good Q3 2024 results, but also surprised Wall Street with its higher Q4-2024 and 2025 forecasts, as well as comments on AI demand.
As a result TSMC stock rose 9.8% yesterday. See Figure 1.
TSMC forecasts Q4 revenue growth to $26.5 billion (7.3% above Wall Street consensus), which will mean YoY growth of 35% - see Figure 2.
C.C. Wei, CEO on AI demand:
“The demand is real, and I believe it's just the beginning of this demand. All right. So one of my key customers say, the demand right now is insane. You know, that's -- it's just the beginning. It's from scientific to be engineering, and will continue for many years”.
TSMC's largest customers include Apple and Nvidia.
On current semiconductor demand cycle: “Overall semiconductor demand, except that the AI, I think everything is stabilized and start to improve.”
Figure 3 shows the year-over-year revenue change for Nvidia, TSMC, and ASML.
Wendell Huang, CFO on Q3 results:
“ (…) our business was supported by strong smartphone and AI related demand for our industry leading 3 nanometer and 5 nanometer technologies. Gross margin increased by 4.6% points sequentially to 57.8%, (…) operating margin increased by 5% points sequentially to 47.5% (…) 3 nanometer process technology contributed 20% of wafer revenue in the third quarter while 5 nanometer and 7 nanometer accounted for 32% and 17% respectively. Advanced technologies defined as 7nanometer and below accounted for 69% of wafer revenue.”
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