TSMC Reports Sales Jump in 1Q24

Taiwan Semiconductor Manufacturing Company reported revenue growth in the opening quarter of 2024. The growth was aided by a sales surge in March and strong demand for high-end chips compatible with generative AI applications.

The contract chipmaker’s revenue rose 16.5% to TWD592.6 billion ($18.5 billion). Sales growth jumped over the first three months of the year: 7.9% in January, 15.8% in February and 34.3% cent in March. Growth in the quarter was its fastest since 3Q22 when revenue rose 49.7% to TWD613.1 billion.

During an earnings call in January, TSMC CEO CC Wei forecasted that full-year revenue would increase from 20% to 25%. The guidance followed flat revenue in 4Q23. The company earmarked $28 billion to $32 billion for capex in 2024, up from $30.4 billion in 2023.

TSMC set strong growth plans that are coming to life. This week, the US Department of Commerce announced plans to award the company $6.6 billion in direct funding and up to $5 billion in government loans to build a third chip production facility in the state of Arizona.

The third Arizona fab is slated for production of chips using 2nm or more by 2030. Arizona’s first fab is on track to start production using 4nm technology in the first half of 2025 after initially targeting this year. The second fab will use 2nm process technology with production slated to begin in 2028.

Furthermore, the company is also planning expansion in Japan. TSMC recently revealed that the second chip production facility in Japan would be located at the same site as its first in southwest Japan. A joint venture between TSMC, a Sony Semiconductor subsidiary, and Denso Corp, stated Toyota would join as a new investor in the second project. Japan’s government earmarked JPY732 billion ($4.9 billion) in subsidies for the venture. Construction is scheduled to begin by end-2024, with operations to start in 2027.

The Japanese government allocated JPY476 billion in support for the first factory, with mass production expected to commence in Q4. Wei noted as much as 60% cent of indirect materials used in production would be sourced locally by end-2030. The total monthly capacity for both facilities will reach more than 100,000 12-inch wafers, using process technology ranging from 40nm to 6nm, TSMC said.