TSMC’s latest financial report shows that 3nm revenue has increased significantly! Continue to develop advanced technologies to seize AI opportunities!
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TSMC’s latest financial report shows that 3nm revenue has increased significantly! Continue to develop advanced technologies to seize AI opportunities!

Posted Date: 2024-01-21

Electronic Enthusiast Network reports (Text/Li Wanwan) On January 18, TSMC announced its fourth quarter financial report for 2023. The report shows that TSMC achieved consolidated operating income of approximately NT$625.53 billion (approximately NT$142.62084 billion) in the fourth quarter of 2023. Compared with the same period last year, revenue was roughly the same, and net profit was approximately NT$238.71 billion. (approximately 54.42588 billion yuan), a year-on-year decrease of 19.3%. Revenue and net profit increased by 14.4% and 13.1% respectively compared with the previous quarter.


3nmStrong growth brings operating income growth

According to the financial report released by TSMC, in the fourth quarter of 2023, its 3nm process revenue increased significantly compared with the previous quarter, accounting for 15% of total wafer revenue. 5nm and 7nm accounted for 35% and 17% of total wafer revenue respectively. Advanced processes (7nm and below) account for 67% of total wafer revenue. TSMC's 3nm process began to achieve revenue from the last quarter. The company said that supported by the continued strong growth of 3nm technology, the company's operating income increased by 14.4% compared with the previous quarter.


From the application side, in the fourth quarter of 2023, TSMC’s revenue from HPC (high performance computing) and smartphones both accounted for 43% of net revenue, and the revenue contributed by IoT, automotive, DCE and other companies accounted for 5% respectively. %, 5%, 2% and 2%. Compared with the third quarter, the revenue contributed by HPC, smartphones, and automobile companies all achieved significant growth, with increases of 17%, 27%, and 13% respectively, while the revenue contributed by the Internet of Things, DCE, and other companies were respectively Declines of 29%, 35% and 16%.


This is the situation in the fourth quarter of 2023, but what about the whole year of 2023? In terms of process technology, the revenue contributed by TSMC's 3nm process accounted for 6% of total wafer revenue in 2023, the revenue contributed by 5nm and 7nm process technology accounted for 33% and 19% respectively, and advanced processes (7nm and below) accounted for 58% of total wafer revenue. The main contributors to revenue in 2022 are 5nm and 7nm, accounting for 26% and 27% of total wafer revenue respectively. Advanced processes (7nm and below) account for 53% of total wafer revenue.


By application field, HPC (high performance computing) will account for 43% of total revenue in 2023, smartphones will account for 38% of total revenue, and IoT, automotive, DCE and other companies will contribute 8% and 8% respectively. 6%, 2%, 3%. Compared with 2022, the revenue of smartphones, Internet of Things, and DCE dropped by 8%, 17%, and 16% respectively. The HPC business remained flat, and the automotive business increased by 15% compared with 2022.

From a geographical perspective, in the fourth quarter of 2023, TSMC's revenue from North American customers accounted for 72% of total net revenue, while revenue from China, Asia Pacific, Japan and EMEA (Europe, the Middle East and Africa) each accounted for 11% of net revenue. %, 8%, 5% and 4%. For the full year of 2023, revenue from North American customers accounted for 68% of total net revenue, and revenue from China, Asia Pacific, Japan and EMEA (Europe, the Middle East and Africa) accounted for 12%, 8%, 6% and 6% of net revenue respectively. %.

AI,HPCDemand drives revenue growth, 2nmR&D is progressing smoothly

At the conference, TSMC President Wei Zhejia gave an outlook for the overall market this year. He predicts that the output value of the semiconductor industry excluding memory is expected to grow by more than 10% this year, and the foundry industry will grow by 20% annually. It is expected that TSMC will be driven by the demand for AI and HPC throughout the year. If calculated in U.S. dollar revenue, the entire Annual revenue will have the opportunity to deliver annual growth of 21% to 25%.

At the same time, TSMC expects capital expenditures in 2024 to be US$28 billion to US$32 billion, while the market estimate is US$28.86 billion. The company said 70-80% of its capital expenditure this year will be on advanced technologies. TSMC’s CFO said that the compound annual growth rate of TSMC’s sales in the next few years is expected to be 15% to 20%. In addition, he also said that the company's 2nm process technology research and development is progressing smoothly and plans to start mass production in 2025. The 2nm process technology will help the company seize future AI-related opportunities.

It can be seen that the development of the artificial intelligence industry in recent years and the implementation of TSMC's 3nm process have brought considerable performance contributions to TSMC's operations. TSMC's 3nm began to generate revenue in the third quarter of this year. By the fourth quarter, 3nm technology revenue accounted for 15% of total wafer revenue, an increase of 14.4% compared with the previous quarter. From an application perspective, this is due to the development of artificial intelligence, which has brought a large demand for high-performance computing power.

TSMC's fourth-quarter operating income sources reflect this well. From the application side, in the fourth quarter of 2023, TSMC's HPC (high-performance computing) accounted for 43% of total revenue, achieving a significant growth of 17% compared with the previous quarter. And as artificial intelligence technology continues to develop, TSMC expects customer demand for 3nm technology to remain strong for many years.

In addition, TSMC’s latest financial report also shows the recovery of its smartphone business. Compared with 2022, TSMC's revenue from smartphones will drop by 8% in 2023. This is mainly due to the continued sluggishness of the smartphone business in the first few quarters of this year. In the fourth quarter, TSMC's revenue from smartphone business increased significantly by 27% compared with the previous quarter, which largely reflects that the smartphone market is showing a growth trend.

It is also worth noting that TSMC’s revenue in the automotive field continues to grow, reflecting the strong demand for chips in the automotive market. Compared with 2022, TSMC's revenue from the automotive field will increase by 15% in 2023. At the same time, in the fourth quarter of this year, TSMC’s revenue from the automotive field also increased by 13% compared with the previous quarter.

write at the end

As the world's largest wafer foundry, TSMC's performance can reflect the general development trend of the industry. It can be seen from its revenue sources that the demand for high-performance computing brought by the development of the artificial intelligence industry has caused TSMC's revenue in this area to continue to grow significantly; judging from the revenue growth in the fourth quarter compared with the previous period, the recovery of smartphones The trend is obvious; in addition, the revenue contributed by the automotive market to TSMC has increased significantly both throughout this year and in the fourth quarter.

TSMC's ability to quickly seize opportunities under the development wave of artificial intelligence and large models also benefits from its outstanding technology. In the past two quarters, the revenue growth brought by TSMC’s 3nm has been very obvious. At the same time, the company's more advanced 2nm technology is also smoothly advancing research and development, and TSMC hopes that its mass production will help the company seize AI-related opportunities to a greater extent.

In addition, TSMC also plans to increase SoIC production capacity to meet the strong demand for AI and HPC in the future. TSMC SoIC is the industry's first high-density 3D chiplet stacking technology. By the end of 2023, TSMC's SoIC monthly production capacity will be about 2,000 pieces. It originally planned to expand to 3,000-4,000 pieces in 2024. Now TSMC plans to increase its production expansion target to 5,000-6,000 pieces. At the end of last year, production capacity increased by as much as 150%-200%, and it is expected that production capacity will increase multiple times by 2025.






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