TSMC’s revenue growth may slow down in 2024

Thanks to orders from Apple and NVIDIA, Taiwan Semiconductor Manufacturing Company (TSMC) can rest assured regarding its revenue, at least for the fourth quarter of this year. However, with the continuous deceleration of the consumer electronics market, coupled with the prolonged slump in chip demand, considerable pressures are mounting on TSMC’s performance growth for the upcoming year. This situation has elicited skepticism from many, questioning whether TSMC can sustain the robust growth trajectory it embarked upon post the outbreak of the COVID-19 pandemic.

As per a report from Wccftech, TSMC’s revenue for the third quarter of 2023 oscillated between $16.5 billion and $17.5 billion. Owing to robust demand from Apple and NVIDIA, the revenue for the fourth quarter of 2023 is projected to witness a sequential increase of 7% to 9%, approximating around $18.6 billion. TSMC has already revised its revenue forecasts downward twice this year, and if the currents remain favorable, a third revision seems unlikely. However, the upcoming scenario may be fraught with intricacies, and amidst the global economic ambiguities, the outlook appears less than sanguine.

Insights from the supply chain suggest that the demand for mid-tier market and non-automotive chips might continue its languid trajectory next year, leaning more towards a gradual recovery after a precipitous decline. Following Apple’s orders for the fourth quarter, iPhone inventory is anticipated to hover around 86 million units, implying a more circumspect approach to future orders. NVIDIA might lend a semblance of support to TSMC, as the surge in demand for Artificial Intelligence (AI) has elevated the order volume for related GPUs.

In summation, TSMC is confronting a tapering of order volumes. Insiders speculate that TSMC might proffer discounts of up to 5% based on clients’ procurement scenarios, adding a layer of uncertainty to revenue growth prospects for 2024.