TSM, the world’s largest contract chip manufacturer, surpassed analyst expectations for the final quarter of 2023.
Revenue was $19.62 billion US, down 4.6% from the prior year. Earnings, at $1.44 per share, were down 23% from the $1.87 US reported in the prior year. Net profit margins were 38.2%.
Revenues and profits were impacted by a reduction in demand for smart-phone and automotive chips. A faster than anticipated pick-up in demand for high end chips designated as important to artificial intelligence enterprises started to offset this decline.
Heading into 2024, TSM feels that the demand for expensive AI processing chips will not only fully offset any further declines in demand for smartphone chips, it should prove sufficient to return Taiwan Semiconductor to a +20% revenue growth rate once again.
Global adoption of the 3-nanometer chips should lead to further margin gains in the coming year and any company reporting a trough net profit margin of 38.2%, well, that’s highly indicative of monopoly pricing power.
https://www.sec.gov/Archives/edgar/data/1046179/000104617924000005/a4q23presentatione.htm
https://www.reuters.com/technology/tsmc-q4-profit-falls-19-beats-market-expectations-2024-01-18/
https://www.investors.com/news/technology/tsm-stock-taiwan-semiconductor-forecasts-return-to-sales-growth-in-q1/?src=A00220
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