Taiwan Semiconductor Manufacturing Company Limited Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance (Q3 2024)

  • Revenue: NT$23.5B (USD terms), a 12.8% sequential increase driven by strong smartphone and AI demand. This compares to Q2’s softer demand and marks a strong rebound.
  • Gross Margin: 57.8%, up 4.6 percentage points from Q2. The improvement was driven by higher utilization and cost efficiencies. This also exceeded prior Q3 guidance by 230bps.
  • Operating Margin: 47.5%, up 5 percentage points from Q2 due to operating leverage.
  • EPS: NT$12.54; ROE: 33.4%.
  • Advanced nodes (7nm and below) accounted for 69% of wafer revenue, consistent with growing demand for leading-edge technologies.

Technology & Platform Mix (Q3 2024)

  • 3nm: 20% of wafer revenue.
  • 5nm: 32% of wafer revenue.
  • HPC: +11% QoQ to 51% of revenue.
  • Smartphone: +16% QoQ to 34% of revenue.
  • IoT: +35% QoQ to 7% of revenue.
  • Automotive: +6% QoQ to 5% of revenue.
  • DCE: –19% QoQ to 1% of revenue.

Balance Sheet & Cash Flow

  • Cash & Marketable Securities: NT$2.2T (USD $69B).
  • CapEx (Q3): NT$207B (~$6.4B USD).
  • Cash From Operations: NT$392B.
  • Inventory Days increased to 87 (+4 days) due to N3/N5 pre-builds.

Q4 2024 Guidance

  • Revenue: $26.1B–$26.9B (+13% QoQ; +35% YoY at midpoint).
  • Gross Margin: 57%–59%.
  • Operating Margin: 46.5%–48.5%.

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's Third 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 webcasts through the company'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 third quarter 2024, followed by our guidance for the fourth 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 the line for a 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 do refer to the safe harbor notice that appears in 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

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