Taiwan Semiconductor Manufacturing Company (TSM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached NT$673.51 billion (US$20.82 billion), up 10.3% sequentially and up to 40.1% year-over-year, driven by strong demand for 3nm and 5nm technologies despite smartphone seasonality.

• Net income for Q2 2024 was NT$247.85 billion, a 9.9% increase from 1Q24 and up to 36.3% year-over-year.

• EPS for Q2 2024 was NT$9.56, up 9.9% sequentially and 36.3% year-over-year.

• Advanced technologies (7nm and below) contributed 67% of wafer revenue; HPC platform revenue surpassed 50% for the first time.

• Strong demand for AI and HPC drove growth, partially offset by smartphone seasonality.

Financial highlights

• Gross margin was 53.2%, slightly higher than 1Q24 and within guidance; operating margin stood at 42.5%.

• Net profit margin was 36.8%, down from 1Q24 but up year-over-year.

• Free cash flow for Q2 2024 was NT$171.99 billion, down from 1Q24 but a significant improvement from 2Q23.

• Cash and marketable securities totaled NT$2,048.64 billion at quarter-end.

• CapEx for Q2 was US$6.36 billion (NT$205.68 billion).

Outlook and guidance

• Q3 2024 revenue expected at US$22.4–23.2 billion, up 9.5% sequentially and 32% YoY at midpoint.

• Q3 gross margin guided at 53.5%–55.5%, operating margin at 42.5%–44.5%.

• 2024 revenue growth forecast raised to slightly above mid-20s% in USD terms.

• Long-term gross margin of 53%+ reaffirmed, despite overseas fab dilution and cost pressures.

• Quarterly cash dividends per share increased to NT$4.00 for Q1 and Q2 2024.