Financial Report Preview | TSMC Stable? March Revenue Surges by 34.4%

TSMC will announce its Q1 financial report tomorrow afternoon.

Performance Forecast

According to a survey of 22 analysts by LSEG SmartEstimate, TSMC is expected to achieve a net profit of NT$217.2 billion (US$6.71 billion) in the quarter ending March 31, a 5% year-on-year increase. In comparison, the net profit in the first quarter of last year was NT$206.9 billion.

Due to strong demand, TSMC announced last week that its first-quarter revenue increased by 16.5% year-on-year, exceeding market expectations and also at the high end of the company's own guidance.

In fact, TSMC releases monthly sales figures, and there was an accelerating trend in March this year, with a 34.4% year-on-year revenue growth in March:

TSMC is the world's largest chip manufacturer, with customers including Apple and NVIDIA. The company has benefited from the surge in demand for artificial intelligence, with a 42% increase in revenue last year and a further 35% increase so far this year.

Key Points of Focus

Market focus areas include TSMC's revenue guidance, capital expenditures, impact of electricity price hikes on gross margins, global layout, progress in advanced processes, and expansion of advanced packaging.

Institutional Views

JP Morgan

In a report in early March, JP Morgan pointed out that due to tightly integrated packaging technology, leading process technology, and the semiconductor industry's most extensive IP and design service ecosystem, TSMC's moat in the AI semiconductor field seems wider than in previous product cycles. It is expected that the market share will exceed 90%, and JP Morgan has raised TSMC's target stock price to NT$850.

As a key driver of AI semiconductors, TSMC's AI processing capabilities in data centers and edge computing are strengthening. JP Morgan's report predicts that by 2027, TSMC's AI-related revenue will account for 25% of the company's total revenue, with 19% coming from data center AI and the rest from edge AI.

Eastspring Investments (managing around NT$90 billion in Taiwanese stock client assets)

Its Vice President Eric Yao recently stated that TSMC maintains a leading position in advanced process technology.

He said, "TSMC may continue to lead in this area, Intel will open up new areas, and Samsung will not have much opportunity to catch up."

Fubon Securities

Its analysts expect TSMC to raise its expectations for AI demand in the coming years. "TSMC has previously stated that by 2026, AI may account for more than ten times its revenue, but based on our calculations, we believe this target may be achieved earlier, possibly in early 2025Rating

Since 2024, according to Bezinga's data, Mehdi Hosseini has given the highest target price of $180 (current stock price is around $140).

Other Events

The main focus is on the U.S. chip reshoring plan, which has recently provided substantial direct funding to TSMC, Samsung, Intel, etc. TSMC, for example, received a subsidy of $6.6 billion in early April, and its total investment in the U.S. will increase from over $40 billion to over $65 billion