TSMC reported a strong fourth quarter with revenue increasing 14.4% sequentially, driven by the ramp-up of their 3-nanometer technology.
Gross margin decreased due to margin dilution from the 3-nanometer ramp, but operating margin slightly exceeded expectations due to higher revenue.
TSMC provided guidance for the first quarter of 2024, expecting a sequential decline in revenue due to smartphone seasonality, partially offset by continued HPC-related demand.
The company expects its 3-nanometer technology to more than triple in revenue contribution in 2024 and account for mid-teens percentage of total wafer revenue.
TSMC plans to expand its global manufacturing footprint, including building specialty technology fabs in Japan and Germany, as well as progressing with its fab construction in Arizona.
Chairman Mark Liu announced his retirement after the 2024 Annual Shareholders Meeting, with CEO C.C. Wei expected to succeed him as Chairman if elected.
Overall, the earnings call highlighted TSMC's strong performance in the fourth quarter, positive outlook for 2024, and strategic initiatives to capture growth opportunities in AI and expand its global presence. The retirement announcement of Chairman Mark Liu was also notable.
Current Fair Value
Overvalued by 3.2% based on the discounted cash flow analysis.