2024-01-18 13:30:59
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Investing.com – Taiwan Semiconductor Manufacturing Co (TW:) (NYSE:) posted a smaller-than-expected loss in the fourth quarter. After the latest generation of chips, sales are higher.
The world’s largest chipmaker forecast a slight decline in performance in the first quarter of 2024, but said chip demand next year will be supported by strong demand for artificial intelligence.
“We expect 2024 to be a year of strong growth for TSMC, supported by… As AI-related demands increase, AI models need to be supported by more powerful semiconductor hardware… Therefore, the value of TSMC’s technology position increases,” CEO CC Wei said in a telephone interview.
Profit in the three months to December 31 fell to NT$238.7 billion ($7.6 billion) from NT$295.9 billion a year ago. When calculating per share Profit fell to NT$9.21. but still higher than our estimate. Investing.com at NT$8.67
Reported revenue was NT$625.5 billion ($20 billion), remaining largely unchanged from the previous year. But this was higher than the forecast of NT$617.24 billion. The figure is also higher than TSMC’s forecast for this year.
Income increased from the previous quarter. This is due to increasing demand for 3nm chips, which TSMC describes as the most advanced semiconductor technology in the industry.
TSMC said it expects first-quarter sales to be between $18 billion and $18.8 billion. With a gross margin of 52% to 54%, gross margin for the fourth quarter was 53%.
The company also forecasts slightly higher capital expenditures in 2024 at between $28 billion and $32 billion. That compares to an estimated $30.1 billion in 2023. Most of this spending will be dedicated to high-performance chips, CEO Wei said.
Demand for high-performance computing chips increased in the fourth quarter. This is driven by increasing interest in the development of artificial intelligence. The launch of OpenAI’s Chat GPT bot in late 2022 has spurred the development and widespread application of similar AI products.
AI development uses a lot of computing power. This, in turn, requires the use of more advanced and more powerful silicones. It also indicates higher demand for chips from TSMC.
Analysts expect TSMC’s earnings to improve amid falling inventory levels among PC and smartphone makers. It will also help cushion demand for chips from falling consumer electronics demand. Easing investment in technology and high interest rates
TSMC is a key supplier to tech giants like Apple Inc (NASDAQ:) and Nvidia (NASDAQ:), with the latter benefiting greatly from increased demand for AI chips following Nvidia’s recent launch of new chips. Designed specifically for AI development
TSMC’s earnings are now above estimates for all four quarters of 2023, which, when coupled with an improving chip demand outlook, is expected to exceed estimates for all four quarters of 2023. As a result, stocks of Taiwanese companies have surged more than 30% in the past year.
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