Taiwan Semiconductor Manufacturing Company Limited Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance (Q1 2024)

  • Revenue was USD 18.9 billion, down 3.8% quarter-over-quarter due to smartphone seasonality but slightly above guidance.
  • Gross margin increased to 53.1% from 53.0% in Q4 2023, mainly due to product mix shifts.
  • Operating margin improved to 42%, up 0.4 percentage points sequentially due to expense controls.
  • EPS reached TWD 8.7 and ROE was 25.4%.
  • Advanced technologies (7nm and below) accounted for 65% of wafer revenue.
  • Revenue by platform:
    • HPC: +3% QoQ to 46% of revenue
    • Smartphone: -16% QoQ to 38%
    • IoT: +5% QoQ to 6%
    • Automotive: Flat at 6%
    • DCE: +33% QoQ to 2%

Balance Sheet & Cash Flow (Q1 2024)

  • Cash and marketable securities reached TWD 1.9 trillion (USD 60 billion).
  • CapEx was TWD 181 billion (USD 5.77 billion).
  • Operating cash flow: TWD 436 billion.
  • Inventory days increased from 85 to 90 due to 3nm ramp.

Q2 2024 Guidance

  • Expected revenue: USD 19.6–20.4 billion (midpoint +6% QoQ, +27.6% YoY).
  • Gross margin: 51%–53% (midpoint decline due to earthquake and electricity cost increases).
  • Operating margin: 40%–42%.
  • Tax rate: Slightly above 19% in Q2, returning to 13%–14% in Q3–Q4.

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Operator: Jeff Su: Good afternoon, everyone, and welcome to TSMC's First Quarter 2024 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. TSMC is hosting our earnings conference call via live audio webcast through the company's website at www.tsmc.com, where you can also download the earnings release materials shortly. [Operator Instructions]. The format for today's event will be as follows: first, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the first quarter 2024, followed by our guidance for the second quarter 2024. Afterwards, Mr. Huang and TSMC's CEO, Dr. C. C. Wei, will jointly provide the company's key messages. Then we will open the lines for the question-and-answer session. As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears on our press release. And now I would like to turn the call over to TSMC's CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance. Wendell Huang: Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with the financial highlights for the first quarter 2024. After that, I will provide the guidance for t

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