TSMC reports highest ever January sales

Taipei, Feb. 7 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, on Wednesday reported its highest-ever January sales with market analysts saying the chipmaker benefited from solid demand for high performance computing (HPC) devices.

In a statement, TSMC said it posted NT$215.79 billion (US$6.87 billion) in consolidated sales in January, up 7.9 percent from a year earlier. January revenue also rose 22.4 percent from a month earlier.

The growth in TSMC's sales echoed the chipmaker's forecast, made at an investor conference held on Jan. 18, that the company will see a boost from strong demand for the 3 nanometer process to produce smartphones and HPC applications in 2024.

TSMC anticipates its sales for 2024 will rise 21-26 percent from a year earlier, beating an earlier market estimate of a 20 percent increase, and that forecast prompted strong buying of TSMC shares at home and its American depositary receipts on the U.S. market following the investor conference.

The 3nm process is the latest technology for which TSMC launched mass production in Tainan at the end of 2022.

At the investor conference, the company forecast its sales will range from US$18.0 billion to US$18.8 billion in the first quarter of this year, with the median figure at US$18.4 billion expected to fall 6.2 percent from a quarter earlier on slow season effects. TSMC made the forecast using an exchange rate of NT$31.1 to US$1.

Analysts said due to the reduced number of working days in February, when the seven-day Lunar New Year holiday falls, TSMC is likely to report a decline in sales in the month.

Based on its first quarter sales forecast, analysts said, TSMC could generate NT$172.0 billion to NT$184.4 billion in average monthly sales during the February to March period.

According to TSMC, the rising popularity of artificial intelligence development is expected to help TSMC return to a healthy uptrend in 2024 after a slower 2023, when its consolidated sales fell 4.5 percent from a year earlier to NT$2.16 trillion, with overall demand affected by high inflation and aggressive rate hikes by major central banks around the world.

TSMC has forecast that the 3nm process, which helped alleviate the effects of overall falling global demand in 2023, will account for 15 percent of its total sales in 2024.

On Tuesday, TSMC announced it has decided to build a second wafer fab in Kumamoto of Japan through a joint venture called Japan Advanced Semiconductor Manufacturing (JASM). Construction will start at the end of 2024 with operations slated to begin at the end of 2027.

The first fab in Kumamoto will open on Feb. 24 with mass production scheduled to start in the fourth quarter of this year.

Together with JASM's first fab, the overall investment in the joint venture will exceed US$20 billion, TSMC said, adding that it had strong support from the Japanese government.