Taiwan Semiconductor Manufacturing Co (TSMC) has surpassed analysts’ expectations by posting impressive sales figures in the final quarter of 2023. Despite a drop in revenues, TSMC’s better-than-expected sales indicate a possible end to the global slump in the chip market.
Sales Performance Overview
In December 2023, TSMC reported sales worth NT$ 176.3 billion ($5.7 billion), representing an 8.4% drop compared to the same period in 2022. However, this decline did not hinder the company’s success. TSMC achieved revenues worth NT$ 625.5 million for the fourth quarter and NT$ 2.16 trillion for the full year 2023—a 4.5% drop compared to its full-year sales in 2022.
Favorable Market Response
Despite the revenue decline, shares in TSMC remained relatively stable on Wednesday, following a 21% rise over the previous 12 months.
Analysts’ Projections
A survey of 27 analysts conducted by Factset had predicted that TSMC would generate sales worth just NT$ 615.8 million in the fourth quarter of 2023. However, TSMC’s actual sales figures have surpassed these expectations, indicating a positive turn for the semiconductor market.
Signs of Recovery
TSMC’s better-than-expected sales provide evidence that the recent downward trend in the global chip market may have come to an end.
Factors Contributing to Market Recovery
According to data from the World Semiconductor Trade Statistics (WSTS) organization, global semiconductor sales experienced growth for the first time in over a year in November 2023. This increase of 5.3% to $45.6 billion was driven by surging demand for computer chips from the AI industry and efforts by Chinese electronics manufacturers to stockpile semiconductors in anticipation of potential restrictions on China’s chip access.
TSMC’s Advantage in the Market
TSMC, with Taiwan’s state-owned National Development Fund as its second-largest shareholder, stands to benefit from any AI boom due to the dominance of its high-tech chip-on-wafer-on-substrate (CoWoS) chips. These distinctive chips give TSMC an edge in the market.
Future Plans and Investments
In a strategic move to capitalize on the AI boom, TSMC announced plans in July 2023 to invest NT$90 billion in constructing a new advanced chip manufacturing facility in Taiwan.
With its better-than-expected sales figures and a potentially recovering chip market, TSMC remains poised for continued success in the coming years.