TSMC reports 16.5% increase in Q1 revenue, surpasses expectations

TSMC Q1 results: Taiwanese chipmaker TSMC reported a 16.5 per cent increase in first-quarter revenue on Wednesday, surpassing market expectations and landing at the upper end of the company's forecast. The surge in sales is attributed to a growing demand for artificial intelligence applications.

As the world's largest contract chipmaker, TSMC serves clients such as Apple and Nvidia, benefiting from the AI boom. Despite the gradual slowdown in pandemic-induced demand, TSMC's revenue for the first three months of the year reached T$592.64 billion ($18.54 billion), up from $16.72 billion in the same period last year.

The performance exceeded TSMC's previous projection of first-quarter revenue ranging between $18 billion and $18.8 billion. Analysts, drawing from 23 estimates, anticipated revenue to hit T$581.45 billion, favouring those with a track record of accuracy.

March alone saw a notable spike in revenue, climbing 34.3 per cent year-on-year to T$195.21 billion and rising 7.5 per cent from the previous month. Despite the typical lull in the first half of the year for Taiwanese tech firms, the AI trend continues to drive demand, even during the off-season after the holiday rush for products like tablets and smartphones in major Western markets.

TSMC, boasting a market capitalisation of $662 billion, opted not to provide detailed forward guidance in its revenue statement. Investors anticipate further insights during the first-quarter earnings report scheduled for April 18, where updates on the current quarter and full-year outlook are expected.

Analysts predict a 4 per cent increase in TSMC's first-quarter net profit, aligning with the LSEG SmartEstimate. Although TSMC's Taipei-listed shares dipped by 0.5 per cent ahead of the revenue release, they have surged by 37 per cent year-to-date, outperforming the broader market's 16 per cent gain.

(With Reuters inputs)