TSMC records first quarter sales of NT$592.64 billion
HPC sales increase by 46% due to strong demand for AI semiconductors
Aftermath of Taiwan earthquake is minimal… Reuters “Earthquake loss of 130 billion won”
TSMC’s Fab 16. (Photo = TSMC)
TSMC, the world’s largest foundry company, achieved performance that exceeded market consensus in the first quarter of this year. This is due to the increase in demand for artificial intelligence (AI) semiconductors. While sales of processes such as 3nm and 7nm decreased, sales of the 5nm process used to produce AI semiconductors increased by 3% compared to the previous quarter.
On the 18th (local time), TSMC announced that it recorded sales of NT$592.64 billion (KRW 25.2583 trillion) in the first quarter. This is a 5.3% decrease compared to the previous quarter. It increased by 16.5% compared to the same period last year. Net profit was NT$225.49 billion (KRW 9.6081 trillion). It decreased by 5.5% compared to the previous quarter and increased by 8.9% compared to the same period last year.
By process, 7nm and below leading-edge process sales accounted for 65%. There was a slight decrease compared to the last fourth quarter. Due to demand for AI semiconductors, 5nm accounted for 37% of total sales. Nvidia and Intel AI semiconductors are produced through the TSMC 5nm process. The sales proportion of 3nm and 7nm processes is around 9% and 19%, respectively.
TSMC’s sales by process in the first quarter. <자료=TSMC>
TSMC’s first quarter sales by product group. <자료=TSMC>
By application, high-performance computing (HPC) and smartphones had the highest proportions. HPC accounted for 46% of sales in the first quarter and recorded a 3% growth compared to the previous quarter. Smartphone sales decreased by 16% compared to the last quarter. The sales proportion is 38%. IoT (6%), automotive (6%), DCE (2%), and others (2%) accounted for.
Regarding its performance in the first quarter of this year, TSMC explained that smartphone sales decreased due to seasonality, but the decrease in sales was largely offset by high HPC-related demand. Regarding the second quarter performance, he said that there will be strong demand for 3nm and 5nm technology, and emphasized that most AI semiconductor companies are cooperating with the company. TSMC predicted that sales related to AI semiconductors will grow at an average annual rate of 50% over the next five years, accounting for 20% of TSMC’s total sales by 2028. TSMC predicted that AI semiconductor sales this year will account for less than 10% of total sales.
To respond to this, TSMC is steadily increasing its chip-on-wafer-on-substrate (CoWoS) production capacity (CAPA). TSMC CEO Wayser said, “(CoWoS) CAPA will more than double this year, but it is still not enough to meet customer demand. We will strive to expand CAPA next year as well.”
The sales forecast for the second quarter was $19.6 billion to $20.4 billion. The median value is $20 billion, an increase of 27.6% compared to the same period last year.
On this day, TSMC explained that the damage from the earthquake that occurred on the 3rd was minor. He added that the fab was successfully restored three days after the earthquake, and that there were no power outages or structural damage. However, it was predicted that the gross margin in the second quarter would decrease by 50 basis points due to losses in wafers and materials. In relation to this, Reuters reported, “TSMC is estimated to incur a loss of 3 billion Taiwan dollars (128 billion won) in the second quarter due to the Taiwan earthquake.”
The current status of overseas fab construction in Japan, the United States, and Germany was also shared. TSMC held an opening ceremony for its fab in Kumamoto Prefecture, Japan in February, and announced that mass production is scheduled for the fourth quarter. The factory will mass produce 12/16 and 22/28nm process products. Regarding Japan’s second factory, construction is scheduled to begin in the second half of 2024 and mass production is scheduled for the end of 2027. The factory produces 6/7nm, 12/16nm, and 40nm products. In the case of the Arizona fab in the United States, the goal is to mass produce the 4nm process in the first half of 2025. The second factory, which is scheduled to produce 2nm and 3nm processes, will begin mass production in 2028. Lastly, in the case of the Dresden fab in Germany, it was explained that construction will begin in the fourth quarter of this year.
TSMC also mentioned 3DIC technology. 3D IC refers to a form of packaging that stacks non-memory semiconductors or memory semiconductors on top of non-memory semiconductors. CEO Weizer said, “Customers have begun to adopt 3D IC technology,” and “Semiconductors with 3D IC technology will soon be released on the market.”
Meanwhile, TSMC took a negative stance on the future market outlook. TSMC CEO Wayser lowered the growth forecast for the entire semiconductor market this year, excluding memory semiconductors, to 10%, saying, “As macroeconomic and geopolitical uncertainty continues, it may put a burden on consumer sentiment and end-market demand.”
The Elec = Reporter Noh Tae-min tmnoh@thelec.kr
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