On Thursday, semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC) announced a robust performance for the first quarter of 2024, driven by soaring global demand for microchips powering diverse technologies from mobile phones to artificial intelligence.
TSMC reported a nearly 9% increase in net profits for the first quarter, reaching NT$225.4 billion ($6.97 billion), compared to NT$206.9 billion in the same period last year. Additionally, first-quarter revenues surged by 13% year-over-year to $18.87 billion.
During the earnings call, CFO Wendell Huang revealed that TSMC anticipates second-quarter revenues to rise by an impressive 27.6%.
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As a leader in chip manufacturing, TSMC controls over half of the world’s silicon chip production, earning it the moniker of the “lifeblood” of the modern world. The company’s client roster includes tech giants like Apple and Nvidia.
TSMC’s advanced microchips play a pivotal role in various industries, making it an indispensable player in the global supply chain.
Despite its dominance, TSMC faces challenges, particularly concerning its fabrication plants in Taiwan, which are vulnerable to natural disasters like earthquakes. A recent magnitude-7.4 quake in Taiwan resulted in some production loss, but TSMC expects minimal impact on second-quarter revenue.
Huang acknowledged the impact of the earthquake, disclosing that “a certain number of wafers in the process were impacted and had to be scrapped.”
“But we expect most of the lost production to be recovered in the second quarter and thus minimum impact to the second quarter revenue,” he said.
TSMC has ambitious expansion plans to meet rising demand and diversify its production base. The company announced the construction of a third semiconductor factory in Arizona, boosted by a preliminary agreement with the U.S. Commerce Department.
This move aligns with the U.S. government’s efforts to strengthen domestic chip production and reduce reliance on foreign suppliers under the Chips and Science Act. Under this agreement, TSMC will receive up to $6.6 billion in direct funding from the U.S. government, raising its total investment in the North American country to $65 billion.
CEO CC Wei highlighted significant progress in TSMC’s Arizona projects, with the first fab already in engineering wafer production and on track for volume production in the first half of 2025.
“In Arizona, we have received the strong commitment and support from our U.S. customers and plan to build three fabs … We have made significant progress in our first fab, which has already entered engineering wafer production in April,” said CC Wei.
“We are well on track for volume production in the first half of 2025.”
The second fab will focus on advanced technologies to meet demand in AI-related applications.
Wei added that the second fab in Arizona has been upgraded “to utilize 2-nanometer technologies to support the strong AI-related demand in addition to the previously announced 3-nanometer” chips.
U.S. Commerce Secretary Gina Raimondo recently remarked that if successful, the TSMC fabs in Arizona would mark the “first time” that super-advanced chips are manufactured on American soil.
This initiative marks a significant milestone in bringing advanced semiconductor production capabilities to the United States, potentially elevating the country’s position in the global semiconductor industry and enhancing its technological competitiveness.
In addition to its U.S. expansion, TSMC recently launched a new $8.6 billion plant in Japan and plans to establish another facility in Kumamoto for advanced chip production, denoting its global footprint and commitment to meeting the growing demand for microchips worldwide.