TSMC's First-Quarter Profit Gains on Booming Demand for AI Chips — Update

By Sherry Qin

Taiwan Semiconductor Manufacturing Co. posted higher first-quarter profit, ending three straight quarters of declines, thanks to a surge in demand for advanced chips amid the global boom in artificial intelligence.

TSMC, which makes chips for the likes of Apple and Nvidia, said Thursday that net profit rose 8.9% from a year earlier to 225.49 billion new Taiwan dollars ($6.96 billion) in the first quarter. That exceeded the estimate of NT215.40 billion in a poll of analysts by FactSet.

First-quarter revenue rose 16.5% on year to NT$592.64 billion after its March revenue increased 34% on year.

TSMC's operating profit margin reached 42.0% in the first quarter, down 3.5 percentage points from a year earlier.

The chipmaker's outlook has brightened recently, coming after an industry-wide inventory glut punished chip makers in 2023.

TSMC is benefiting from a smartphone market that has started to expand again, and from the sudden surge in demand from generative artificial intelligence, stoking demand for its prowess in manufacturing cutting-edge chips.

TSMC said first-quarter revenue from its high-performance computing segment, which includes AI chips, rose about 3% on quarter, while revenue from smartphones fell 16% and revenue from its Internet of Things segment rose 5%.

TSMC said revenue from customers in North America accounted for 69% of the total revenue, down from 72% in the fourth quarter.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

April 18, 2024 02:07 ET (06:07 GMT)

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