Taiwan Semiconductor Manufacturing Company Limited Q2 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Highlights (Q2 2024)

  • Revenue: USD 20.8B, up 10.3% QoQ (13.6% in NT$). Growth driven by 3nm and 5nm demand, partially offset by smartphone seasonality.
  • Gross Margin: 53.2%, up 0.1 percentage points QoQ. Improvement driven by cost and FX benefits, partially offset by N3 ramp dilution.
  • Operating Margin: 42.5%, up 0.5 percentage points QoQ.
  • EPS: NT$ 9.56.
  • ROE: 26.7%.
  • Cash & Marketable Securities: NT$ 2T (USD 63B).
  • CapEx: NT$ 206B (USD 6.36B).
  • Free Cash Flow: Cash balance increased NT$ 101B.

Revenue Mix Highlights

  • 3nm: 15% of wafer revenue (up from early ramp stages in previous quarters).
  • 5nm: 35%.
  • 7nm: 17%.
  • Advanced technologies (7nm and below): 67% of revenue.
  • HPC platform: Up 28% QoQ, reached 52% of revenue (first time surpassing 50%).
  • Smartphone: Down 1% QoQ, 33% of revenue.

Q3 2024 Guidance

  • Revenue: USD 22.4B–23.2B (midpoint +9.5% QoQ, +32% YoY).
  • Gross Margin: 53.5%–55.5% (midpoint 54.5%).
  • Operating Margin: 42.5%–44.5%.

Key Management Messages

  • Gross margin beat expectations due to higher utilization; Q3 margins expected to improve further despite N3 dilution and electricity price increases.

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's Second Quarter 2024 Earnings Conference and Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. Today's event is being webcast live through TSMC's website at www.tsmc.com, where you can also download the earnings release materials. If you are joining us through the conference call, your dial-in lines are in listen-only mode. 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 second quarter 2024, followed by our guidance for the third quarter 2024. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. Wei, will jointly provide the Company's key messages. Then, we will open both the floor and the line for the Q&A session. As usual, I'd like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risk and uncertainties, which would cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears in our press release. And now, I would like to turn the microphone 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 second quarter of 2

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