Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported forecast-beating, record first-quarter results, citing strong demand trends in the high-performance computing and automotive segments. The company guided to in-line second-quarter revenues and further margin expansion.
The stellar performance comes despite the supply chain challenges and input cost inflationary environment.
What Happened: TSMC's first-quarter net income climbed 45.1% year-over-year to NT202.73 billion ($7 billion). The net income was up 22% from the previous quarter.
Earnings per share came in at NT$7.82 or $1.40 per ADS, exceeding the consensus estimate of $1.33, according to Benzinga Pro.
The Taiwanese foundry confirmed the top-line number it reported last week. First-quarter net revenue climbed 35.5% year-over-year to NT$491.08 billion ($16.95 billion). On a quarter-over-quarter, the increase was 11.6%.
Related Link: Apple Chip Supplier TSMC's Market-Cap Leapfrogs Above High-Profile Chinese Tech Stalwarts Tencent, Alibaba
TSMC manufactures chips that go into different applications and products. The company counts Apple, Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), Nvidia Corporation (NASDAQ:NVDA) and Qualcomm, Inc. (NASDAQ:QCOM) among its customers.
The company noted that 5-nanometer process node accounted for 20% of the total first-quarter wafer revenue and 7-nm made up 30% of the total.
Gross margin came in at 55.6%, a 2.9%-point expansion from the previous quarter. The metric also exceeded the company's guidance range of 53-55%.
"Our first quarter business was supported by strong HPC and Automotive-related demand," said Wendell Huang, VP and chief financial officer of TSMC.
What's Next: TSMC forecasts strong demand trends for the second quarter, underpinned by HPC and automotive demand.
The company expects second-quarter revenue of $17.6 billion to $18.2 billion, surrounding the consensus estimate of $18 billion. Gross and operating margins are expected in the range of 56-58% and 45-47%, respectively.
Price Action: The U.S.-listed ADRs of TSMC closed Wednesday's session up 4.17% at $101.50.
Related Link: Apple Supplier TSMC Plans To Build Advanced Chip Packaging Plant In US: Report
Photo: Courtesy of TSMC
