by Yimou Lee and Faith Hung
TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing (TSMC) said on Thursday it expects revenue growth of more than 20% this year thanks to solid demand in artificial intelligence (AI).
The Taiwanese semiconductor giant, the world’s largest subcontractor in chip manufacturing and one of the main suppliers to Apple and Nvidia, also published quarterly net profit above market expectations and said it anticipated spending of stable investments for the current year.
On the Taipei Stock Exchange, TSMC shares, which gained 32% last year, ended Thursday with a gain of 1.2%, compared to an increase of 0.4% for the benchmark index. In Europe, semiconductor specialists such as STMicroelectronics, ASML and Infineon are advancing around 09:30 GMT by 2.18%, 1.57% and 2.54% respectively.
TSMC said it plans to expand its global footprint with the construction of a factory in Germany in the fourth quarter of 2024 and forecast capital spending of $28 billion to $32 billion for this year, the same pace as in 2023 .
Although better than expected, TSMC’s net profit in the fourth quarter of 2023, however, fell 19% year-on-year, to 238.7 billion Taiwan dollars (7.6 billion dollars or 6.9 billion euros). It has suffered from global economic woes that have hit demand for chips used in sectors ranging from cars to mobile phones to computer servers.
The LSEG SmartEstimate consensus forecast a profit of NT$226.4 billion in the October-December period.
“Our activity in the fourth quarter was supported by the continued ramp-up of our industry-leading 3-nanometer (engraving) technology,” explained Wendell Huang, CFO of TSMC.
He added that the current quarter would be affected by the seasonality of the smartphone business, but the strength of the high-performance computing segment should mitigate this impact.
TSMC, Asia’s most valuable publicly traded company, also reported a 1.5 percent drop in fourth-quarter revenue year-on-year to $19.62 billion, which is in line with the company’s forecasts of between $18.8 billion and $19.6 billion.
Capital spending in the fourth quarter was $5.24 billion, compared to $7.1 billion in the third quarter.
(Reporting Yimou Lee and Faith Hung; written by Ben Blanchard; Diana Mandiá and Claude Chendjou, edited by Blandine Hénault)
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