Latest TSM Earnings Report Q4 2024

TSMC's Q4 2024 earnings report reveals a 57% net profit increase to NT$374.68 billion, driven by strong demand for 3nm and 5nm technologies.

Author

Milan Reichl
February 16th, 2025 • Reading Time: 5 minutes

Taiwan Semiconductor Manufacturing Company Limited

Company Overview

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is the world's largest dedicated semiconductor foundry, providing a range of integrated circuit manufacturing services. Founded in 1987 by Morris Chang, TSMC pioneered the pure-play foundry business model, focusing solely on manufacturing without designing its own chips. Headquartered in Hsinchu, Taiwan, the company serves a diverse clientele, including major technology firms such as Apple, NVIDIA, and AMD. TSMC's advanced process technologies are integral to high-performance computing, smartphones, automotive electronics, and Internet of Things (IoT) applications. In 2024, the company reported record quarterly revenue of NT$868.5 billion (approximately $26 billion) in the fourth quarter, contributing to an annual revenue of NT$2.9 trillion, a 34% increase from the previous year. This growth is largely driven by the surge in demand for AI-related chips, with AI server and processor revenues expected to triple, accounting for about 15% of TSMC's total revenue. Under the leadership of CEO and Chairman C.C. Wei, TSMC continues to expand its global footprint, with significant investments in new manufacturing facilities in the United States, Japan, and plans for expansion into Germany. As of February 15, 2025, TSMC's stock price is $203.90, reflecting its robust position in the semiconductor industry.

Latest TSM Earnings Comparison (Q4 2024)

Metric

Expected

Actual

Variance

EPS

$2.16

$2.24

3.70%

Revenue

$26.38B

$26.88B

1.91%

Historical TSM Earnings Data

Period

EPS (Exp/Act)

Revenue (Exp/Act)

Variance (EPS/Revenue)

Q3 2024

$1.80 / $1.94

$23.09B / $23.5B

7.78% / 1.78%

Q2 2024

$1.38 / $1.48

$20.02B / $20.82B

7.25% / 4.01%

Q1 2024

$1.31 / $1.38

$18.41B / $18.87B

5.34% / 2.51%

Q4 2023

$1.37 / $1.44

$19.45B / $19.62B

5.11% / 0.87%

TSM Earnings Call Summary Q4 2024

Highlights

  • Record Revenue Growth: Q4 revenue surged 14.3% QoQ and 30% YoY to $90B in 2024, driven by strong 3nm and 5nm demand.

  • Profitability Expansion: Gross margin rose to 59%, with EPS of TWD 14.45 and ROE at 36.2%.

  • AI-Driven Growth: AI accelerator revenue tripled in 2024, now contributing mid-teens percentage of total revenue, with demand expected to double in 2025.

  • HPC & Smartphone Demand: HPC revenue grew 19% QoQ, accounting for 53% of Q4 revenue, while smartphone revenue grew 17% QoQ.

  • Advanced Process Leadership: 3nm revenue contributed 26% of wafer sales, while advanced nodes (7nm & below) comprised 74% of total wafer revenue.

  • CapEx Expansion for Future Growth: 2025 CapEx guidance raised to $38B–$42B to support N2, advanced packaging, and global expansion.

  • Raised 2025 Guidance: Revenue expected to grow mid-20% YoY in USD terms, with a long-term CAGR approaching 20%.

Risks

Despite strong financials, TSMC faces several key challenges:

  1. Overseas Fab Profitability Concerns: U.S. and Japan fabs are expected to dilute gross margin by 2%-3% annually for the next five years due to higher costs and smaller scale.

  2. Macroeconomic Uncertainty: Global demand for smartphones and PCs remains modest, with AI demand driving most of the growth.

  3. Export Restrictions & Geopolitical Risks: New U.S. AI chip restrictions on China pose potential risks to revenue growth in key markets.

  4. Rising Energy & Inflation Costs: Higher electricity costs in Taiwan and overseas fabs could impact overall margins by at least 1% in 2025.

  5. Capacity Expansion Execution Risks: CoWoS and advanced packaging ramps must align with customer demand and AI adoption trends.

Opportunities

TSMC is positioned for long-term leadership in semiconductor manufacturing:

  1. AI-Driven Growth Acceleration: AI accelerator revenue expected to double in 2025, driving mid-40% CAGR for AI-related sales over the next five years.

  2. 3nm & 2nm Technology Ramp: Strong customer demand for N3 and N2, with 2nm entering mass production in H2 2025.

  3. Global Expansion & Localization: Arizona Fab 1 entered volume production in Q4 2024, with Fab 2 and Fab 3 on track; Kumamoto (Japan) and Dresden (Germany) fabs expanding specialty technology capabilities.

  4. Advanced Packaging Expansion: CoWoS capacity to increase 2x in 2025, with additional SoIC integration for AI and HPC applications.

  5. Smartphone & Edge AI Growth: AI-enabled mobile and PC chips expected to increase silicon content and shorten upgrade cycles.

Outlook

  • Sustained High Growth: 2025 revenue forecast at mid-20% YoY growth, driven by AI, HPC, and advanced packaging expansion.

  • Advanced Node Leadership: N3 adoption accelerating, while N2 and A16 ramping in H2 2025 & 2026 for next-gen AI and mobile applications.

  • Overseas Fab Impact on Margins: Gross margin expected to decline slightly in 2025 (2%-3%) as overseas fabs scale up.

  • AI & HPC Market Leadership: TSMC remains the dominant player in AI chips, serving leading hyperscalers and semiconductor firms.

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The information is provided for educational purposes only and does not constitute financial advice or recommendation and should not be considered as such. Do your own research.