Thanks to the strong demand for AI and expected price increases, Taiwan Semiconductor's sales in July increased to NT$256.95 billion. Morgan Stanley has listed Taiwan Semiconductor as its preferred stock, stating that its valuation is more attractive after recent sell-offs.
After Q2 performance exceeded expectations, TSMC continued its strong growth in July sales.
On Friday, August 9, TSMC announced its latest monthly performance. Thanks to strong demand and expected price increases for AI, TSMC's July sales were NTD 256.95 billion, a year-on-year increase of 44.7% and a month-on-month increase of 23.6%. Since the beginning of this year, sales have reached NTD 1,523.107 billion, a year-on-year increase of 30.5%.
TSMC's Taiwan stock rose sharply today, closing up 4.2%. In the US stock market, although TSMC's stock price has fallen slightly since "Black Monday", the company has still risen more than 60% so far this year. Morgan Stanley even believes that after the recent sell-off, TSMC's valuation is even more attractive. The institution recently listed TSMC as its top pick.
Morgan Stanley's analyst Charlie Chan wrote in a report that in the long-term semiconductor downturn, we are bullish on TSMC's quality and defensiveness. Confirming price increases and continued strong capital expenditures in AI should be the key catalysts for TSMC.
According to Taiwan media reports, IC design companies revealed that TSMC not only raised prices in 2024, but also conveyed to multiple customers in July that the 5/3-nanometer process in 2025 would see increases ranging from 3% to 8% due to continuous cost increases, which will maintain huge pressure on gross margins of 53% in the long run and successfully shift to customers.
Chan predicts that with price hikes, "Taiwan Semiconductor should be able to achieve over 55% gross margin in 2025, and gradually approach the 60% level between 2028 and 2030 after achieving economies of scale at overseas wafer plants."
Industry insiders say that TSMC's orders, including AI and HPC, are strong. At the same time, it has entered the peak season for consumer electronics shipments, with large orders from Apple, Qualcomm, MediaTek, Intel, AMD, NVIDIA and Broadcom. The 3/5 nanometer production capacity will continue to be fully loaded, and TSMC is expanding production capacity to meet strong customer demand.
TSMC's Q2 performance exceeded expectations, with sales, net income and gross margin all higher than expected. The company's Q2 net revenue was NTD 673.51 billion, a year-on-year increase of 40.1%; net income was NTD 247.85 billion, a year-on-year increase of 36.3%; and gross margin reached 53.2%. Analysts predict that TSMC's Q3 revenue will increase by 37% to NTD 747.4 billion.
TSMC's Q2 performance exceeded expectations, with sales, net income and gross margin all higher than expected. The company's Q2 net revenue was NTD 673.51 billion, a year-on-year increase of 40.1%; net income was NTD 247.85 billion, a year-on-year increase of 36.3%; and gross margin reached 53.2%. Analysts predict that TSMC's Q3 revenue will increase by 37% to NTD 747.4 billion.
Editor/Lambor