TSMC delivered impressive performance in its second fiscal quarter.
On July 17th, integrated circuit foundry giant TSMC released its Q2 2024 financial report, with consolidated revenue of approximately NT $673.51 billion during the period, an increase of 40.1% compared to the same period last year and a month on month growth of 13.6%. Calculated in US dollars, Q2 revenue was US $20.82 billion, a year-on-year increase of 32.8% and a month on month increase of 10.3%; The net profit for the second quarter was NT $247.85 billion, an increase of 36.3% compared to the same period last year and a 9.9% increase compared to the first quarter. It is expected to be NT $235 billion. The gross profit margin for the second quarter of 2024 is 53.2%, an increase of 0.1% compared to the previous quarter, and is expected to be 52.6%.
TSMC's second quarter financial indicators for revenue, gross profit margin, and operating profit margin were all better than the company's expectations and roughly in line with industry expectations.
TSMC announced its third quarter performance guidance revenue of $22.4 billion to $23.2 billion, an increase of 7.6% to 11.4% compared to the $20.82 billion revenue in the second quarter of this year, with a median of 9.5%. According to TSMC's target single quarter US dollar revenue, it will challenge a historical high. The annual performance growth rate for this year will be between 24% and 26%.
In the last press conference, TSMC assessed that the growth rate of its performance this year would be between 21% and 26%. However, this press conference further narrowed the range and fell within the upper limit of the forecast.
Announcement shows that in the second quarter, revenue from advanced processes (including 7-nanometer and more advanced processes) reached 67% of the total wafer sales for the quarter, an increase of two percentage points from 65% in the first quarter of this year. Among them, 3 nanometer shipments accounted for 15% of sales, and in the first quarter of this year, 3 nanometer accounted for 9%; The shipment of 5-nanometer process accounted for 35%, and the proportion in the first quarter was 37%; The shipment of 7-nanometer process is 17%, accounting for 19% in the first quarter.
TSMC's Chief Financial Officer, Huang Renzhao, explained that TSMC's strong performance in the second quarter's 3 nanometer offset the seasonal factors of smartphones. HPC (high-performance computing) revenue increased by 28% month on month, contributing more to revenue than smartphones, which accounted for 33% of revenue. The decrease in inventory turnover days was mainly due to the growth of 3 nanometer shipments.
TSMC Chairman and President Wei Zhe jia stated at the press conference that TSMC continues to invest in advanced processes and support customer needs to make them successful. Customer success is what makes TSMC successful. We are pleased to see TSMC's customer success in the past few years, with leading nodes continuing to produce locally and closely cooperating with customers to share value. We believe that these strategies will enable TSMC to continue to grow healthily.
Huang Renzhao mentioned that in order to support customer demand, TSMC has slightly narrowed its forecast range for capital expenditures. The original range of $28 billion to $32 billion will be changed to an estimated range of $30 billion to $32 billion. The relevant statements are generally in line with market expectations, but TSMC did not raise the high benchmark, but instead moved the low benchmark upwards.
Wei Zhejia also responded to analysts' concerns about the tight demand for advanced packaging CoWoS (TSMC's 2.5D/3D packaging technology) at the press conference. He mentioned that the popularity of artificial intelligence (AI) has driven the demand for CoWoS, and TSMC's CoWoS demand is very strong. TSMC continues to expand and hopes to achieve supply-demand balance from 2025 to 2026. The capital expenditure of CoWoS cannot be clearly stated at present, as it is striving to increase every year. Last time, it was mentioned that the company's production capacity has doubled this year, and the company is working very hard to expand its production capacity.
Regarding TSMC's handling of geopolitical risks, Wei Zhejia responded at a press conference on the 18th that the company's strategy and plans have not changed, and its overseas operations will continue to develop in the United States, Japan, and Europe.
TSMC has successively established new factories in Arizona, USA, Kumamoto, Japan, and Germany, among which the Kumamoto factory officially opened and began operation at the beginning of this year, and has also received subsidies from the Japanese government.
TSMC's full year outlook for the semiconductor industry remains the same as before, expecting the global semiconductor market to grow by about 10% in 2024. TSMC will continue to focus on advanced packaging processes and expects its market share to continue to increase this year.