TSMC Q2 net profit hits high as gross margin beats estimate

Taipei, July 16 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday said the company's net profit for the second quarter of this year hit a new quarterly high with the gross margin beating TSMC's estimate during the current AI boom.

In a statement, the world's largest contract chipmaker said it posted NT$706.56 billion (US$21.96 billion) in net profit in the April-June period, up 77.4 percent from a year earlier and up 23.4 percent from a quarter earlier.

Second quarter earnings per share hit NT$27.25, compared with NT$15.36 over the same period of last year and NT$22.08 a quarter earlier, TSMC said.

Riding the wave of strong global demand for high-performance computing devices, Internet of Things applications and automotive and consumer electronics, TSMC said it posted US$40.20 billion in consolidated sales in the second quarter, which was at the higher end of its previous estimate ranging from US$39.0 billion to US$40.2 billion made in mid-April.

In Taiwan dollar terms, TSMC's second quarter consolidated sales reached the highest ever quarterly level of NT$1.27 trillion, up 36.0 percent from a year earlier and up 12.0 percent from a quarter earlier, the company said.

Due to an improvement in efficiency and an increase in production capacity utilization, TSMC said its gross margin -- the difference between revenue and cost of goods sold -- stood at 67.7 percent in the second quarter, higher than an earlier estimate of 65.6-67.5 percent.

The second quarter gross margin was up 9.1 percentage points from a year earlier and up 1.5 percentage points from a quarter earlier, TSMC said.

Chips using the 2-nanometer process accounted for 3 percent of total sales in the second quarter, while chips using the 3nm, 5nm and 7nm processes made up 30 percent, 33 percent and 11 percent of the total, respectively.

In other words, these three advanced technologies accounted for 77 percent of total sales in the second quarter, up from 74 percent in the first quarter. The 2nm process is TSMC's latest technology to enter mass production.

In the first half of this year, TSMC posted NT$1.28 trillion in net profit, up 68.3 percent from a year earlier, while EPS rose to NT$49.32 from NT$29.30 a year earlier. The company's gross margin rose 8.3 percentage points from a year earlier to 67 percent in the six-month period.