On Thursday, October 17th, global chip foundry giant TSMC announced its third quarter 2024 financial report, which was stronger than expected in all indicators and raised its performance guidance, driving the stock price to rise sharply before the US stock market opened.
Analysts generally believe that TSMC's recent financial report has eased market concerns about weak demand for AI due to Asma's significantly lower than expected financial report. TSMC's US stock rose over 7% in pre-market trading, now reporting $201.5 per share. Today's stock price may hit a new historical high, with a cumulative increase of over 84% since the beginning of the year.
Specifically, TSMC stated in its financial report that for the third quarter ending on September 30th, TSMC recorded a revenue of NT $759.69 billion (US $23.5 billion), an increase of 39% compared to the same period last year, with market expectations of NT $742.66 billion; The net profit for the third quarter recorded NT $325.258 billion (US $10.1 billion), a year-on-year increase of 54.2%, exceeding market expectations of NT $299.3 billion; The gross profit margin is 57.8%, with an estimated 54.8%, higher than the 54.3% in the same period last year.
According to TSMC's financial report, the 3nm process accounted for 20% of the company's revenue in the third quarter, 5nm accounted for 32% of revenue, and 7nm accounted for 17%. Among them, the proportion of revenue from 3nm manufacturing showed a significant increase in the third quarter.
Analysts generally believe that TSMC's gross profit margin returning to around 58% this quarter is a major highlight of the financial report, or mainly due to the driving force of Apple's new machines and AI demand. The company's 3nm production continues to increase, leading to an increase in the company's average product price and gross profit margin.
At the same time, TSMC's revenue and gross profit margin expectations for the next quarter significantly exceeded market expectations. The company expects a revenue of $26.1-26.9 billion (market expectation $24.9 billion) and a gross profit margin of 57-59% (market expectation 54.7%) for the fourth quarter of 2024.
Industry insiders said that ASML's previously released third quarter report showed that its order volume in the third quarter was only half of the expected level, suggesting that global chip manufacturing capacity growth may slow down. However, TSMC's short-term to medium-term revenue prospects remain stable, which may reignite market confidence in the AI outlook.
In the subsequent earnings conference call, TSMC Chairman Wei Zhe jia stated that his assessment of the market's demand for AI is genuine and will continue for many years, and that this is only the beginning of the demand for AI chips. The demand for chips other than AI is gradually stabilizing and improving.