Taiwan's TSMC, the world's largest foundry (contract chipmaker), posted a record quarterly net profit in the first quarter, beating market forecasts, as the "artificial intelligence (AI) mega trend" powered results despite the war between the United States and Iran.
According to Reuters and Bloomberg on the 16th, TSMC said in its earnings release that first-quarter net profit jumped 58.3% from a year earlier to 572.5 billion Taiwan dollars (about 26.7 trillion won).
That topped the market forecast compiled by Bloomberg of 542.4 billion Taiwan dollars (about 25.3 trillion won), marking an eighth straight quarter of double-digit net profit growth.
Earlier, on the 10th, TSMC released that March revenue rose 45.2% on-year to 415.19 billion Taiwan dollars (about 19.3 trillion won), and first-quarter revenue rose 35.1% on-year to 1.1341 trillion Taiwan dollars (about 52.9 trillion won), both record highs on a monthly and quarterly basis, respectively.
In first-quarter revenue, the shares of the 3-nanometer (nanometer, one-billionth of a meter), 5-nanometer, and 7-nanometer processes were 25%, 36%, and 13%, respectively, with these advanced nodes accounting for 74% and contributing to the increase in net profit.
Amid assessments that demand for TSMC's 3-nanometer process and advanced packaging technology still exceeds production capacity, Bloomberg said the AI investment boom has not cooled despite the outbreak of war at the end of February.
Although the war could disrupt supplies of materials needed for chip production, such as helium and neon, there are views that TSMC can withstand the impact.
Huang Ren-zao (Wendell Huang), TSMC's chief financial officer (CFO), said he does not expect the war to affect supplies of key materials such as helium and hydrogen in the short term.
He added, "We source (materials) from multiple suppliers in different regions and have safety stock prepared," explaining that for now energy supplies are also sufficient to maintain normal operations.
Chair Wei Zhe-jia of TSMC said, "Given that the current situation in the Middle East heightens macroeconomic uncertainty, we are planning our business cautiously," but added, "Demand related to AI remains very solid."
He went on, "We maintain strong confidence that this year's revenue will increase more than 30% in dollar terms."
TSMC also projected that second-quarter revenue will be $39 billion to $40.2 billion (about 57.5 trillion to 59.2 trillion won), setting another all-time high. Revenue a year earlier was $30.1 billion (about 44.3 trillion won).
At its earnings release in January, TSMC indicated this year's capital expenditures would be $52 billion to $56 billion (about 76.6 trillion to 82.5 trillion won), up as much as 37% from $40.9 billion (about 60.3 trillion won) last year; this time, it projected spending would be near the upper end at $56 billion.
TSMC's share price has climbed more than 30% this year, setting an intraday record high the day before the earnings release, and its market capitalization is about twice that of Samsung Electronics.
Boosted by TSMC's share gains, Taiwan's stock market capitalization reached $4.14 trillion (about 6,099 trillion won) as of the previous day, surpassing the United Kingdom's $4.09 trillion (about 6,026 trillion won) to rank seventh in the world, Bloomberg reported.