TSMC announces 2023Q4 financial report

Recently, Taiwan Semiconductor Manufacturing Company (TSMC) disclosed its financial performance for the fourth quarter of 2023, revealing revenues of 625.53 billion New Taiwan Dollars. This figure is nearly identical to the same period last year, marking a 14.4% increase from the previous quarter. In USD terms, the revenue stood at $19.62 billion, a slight decrease of 1.5% year-over-year, but a 13.6% increase sequentially. This revenue slightly exceeded TSMC’s expectations, which ranged between $18.8 billion and $19.6 billion.

For the fourth quarter of 2023, TSMC reported a net profit of 238.71 billion New Taiwan Dollars. The earnings per diluted share were NT$9.21 (or $1.44 per ADR unit), representing a 19.3% decline compared to the same period last year. Compared to the third quarter of 2023, the net profit saw a 13.1% increase.

In the third quarter of 2023, TSMC’s gross margin, operating margin, and net profit margin were 54.3%, 41.7%, and 38.6%, respectively. By the fourth quarter of 2023, these margins slightly declined, with the gross margin at 53%, operating margin at 41.6%, and net profit margin at 38.2%.

During the fourth quarter of 2023, shipments of the 3nm, 5nm, and 7nm processes accounted for 15%, 35%, and 17% of total revenue, respectively. Combined, these processes contributed 67% of the sales, a significant increase from 59% in the previous quarter. The substantial rise in the production of the 3nm process means that advanced technologies now constitute two-thirds of TSMC’s revenue. In TSMC’s terminology, processes of 7nm or more advanced are classified as advanced technologies.

TSMC attributed the revenue of the fourth quarter of 2023 to the robust growth in the production volume of its 3nm process. Looking ahead to the first quarter of 2024, the company anticipates a seasonal impact from the smartphone sector, which is expected to be offset by the demand for High-Performance Computing (HPC). TSMC forecasts revenues for the first quarter of 2024 to be between $18 billion and $18.8 billion (assuming an average exchange rate of 31.1 NT$ to 1 USD), with a gross margin between 52% and 54%, and an operating margin between 40% and 42%. Additionally, TSMC projects its capital expenditures for 2024 to be in the range of $28 billion to $32 billion.