TSMC expected to report 32% jump in Q2 revenue on AI boost: Reuters

on Jul 10, 2024
  • Revenue calculated by Reuters beat an LSEG SmartEstimate, drawn from 21 analysts, of T$654.27 billion.
  • Company's June revenue jumped by 33% compared to last year: TSMC.
  • Morgan Stanley's outlook update helped TSMC breach the $1 trillion mark in market capitalisation on Monday.

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Taiwan Semiconductor Manufacturing Company (TSMC) which is the world’s largest contract chipmaker is expected to report a 32% increase in revenue for the April-June quarter at T$673.51 billion ($20.67 billion), a Reuters calculations has revealed, on the back of rise in demand for artificial intelligence (AI) applications. 

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The calculated revenue beat an LSEG SmartEstimate, drawn from 21 analysts, of T$654.27 billion.

Reuters said the company benefited from the surge towards AI which helped it weather the tapering off of pandemic-led demand and pushed TSMC’s share price to a record high.

It is expected to report a 30% year-on-year rise in Q2 net profit, according to an LSEG SmartEstimate as reported by Reuters.

TSMC will report second-quarter earnings on July 18. 

June revenue jumps by 33% YoY, company says

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On Wednesday, the company released its June revenue figures reporting a 33% growth in revenue for the month as compared to June last year. 

The revenue still showed a dip of 9.5% from May this year, but year to date revenue showed an increase of 28% compared to the same period last year at NT$1,266.15 billion.

TSMC in spotlight for breaching the trillion-dollar club

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On Monday, the Taiwanese chipmaker listed in both Taiwan and New York briefly broke the $1 trillion market capitalization mark in a feat that put it ahead of Tesla as the seventh most valuable technology giant on the stock market. 

The rally came after Morgan Stanley updated its outlook on the company’s shares and increased its price target to NT$1,180.00 from NT$1,080.00 in what reflected an anticipation of positive second-quarter results. 

The company produces over 60% of the world’s semiconductors and over 90% of advanced semiconductors. The strategic importance of the company is explained by the fact that it contributes 15% of Taiwan’s GDP. 

What did Morgan Stanley say?

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Morgan Stanley upped its target on the stock by roughly 9%, predicting that TSMC will raise its full-year sales forecast in the upcoming earnings announcement, according to Bloomberg. 

The brokerage also expected TSMC to increase wafer prices due to its robust bargaining power.

According to Bloomberg, Morgan Stanley analysts, including Charlie Chan, on Sunday said 

“TSMC’s ‘hunger marketing’ strategy appears to be effective,” 

They also mentioned that TSMC is conveying a message that leading-edge foundry supply could be tight in 2025, and customers may not get sufficient capacity allocation without recognizing TSMC’s value.

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