Key Takeaways
- Taiwan Semiconductor Manufacturing Company (TSMC) reported June 2024 revenue of NT$218.13 billion, marking a formidable 39.8% year-on-year increase, confirming the sustained, voracious demand from the artificial intelligence sector.
- Despite the strong annual growth, revenue saw an 11.1% sequential decrease from May 2024, raising questions about order timing, potential near-term capacity ceilings, or minor softening in non-AI segments.
- TSMC’s dominance is widening, with recent estimates placing its global foundry market share at 62% in the first quarter of 2024, significantly ahead of competitors Samsung and Intel, who continue to face challenges with their advanced node technology.
- The firm’s performance acts as a critical barometer for the entire technology supply chain, with its results signalling continued high capital expenditure from hyperscalers but also highlighting the immense concentration risk within a single, geopolitically sensitive company.
Taiwan Semiconductor Manufacturing Company (TSMC) has once again demonstrated its indispensable role at the heart of the global technology ecosystem, reporting June 2024 revenues that underscore the ferocious and unabating demand for high-performance computing. The firm posted consolidated revenue of NT$218.13 billion for the month, a figure that, while representing a sequential dip, translates to an explosive 39.8% increase compared to the same period last year. This result not only cements TSMC’s position as the world’s preeminent semiconductor foundry but also serves as a crucial data point for interpreting the health of the entire AI and technology hardware landscape.
Deconstructing the Performance
While the year-on-year growth is striking, the 11.1% sequential decline from May 2024 warrants a closer look. Such monthly fluctuations are not uncommon due to customer order schedules and shipment timing. However, it injects a degree of nuance into an otherwise unambiguously positive growth narrative. For the second quarter of 2024, TSMC’s revenues totalled NT$646.68 billion, a 36.9% year-on-year increase that comfortably aligns with the upper end of its own guidance. The performance for the first half of the year paints an even more robust picture, with revenues climbing 29.8% to NT$1.26 trillion. The primary engine behind this expansion remains, unequivocally, the demand for leading-edge nodes used to produce AI accelerators for clients like NVIDIA and AMD.
| Metric | Figure (NT$ Billion) | Year-on-Year Change | Sequential Change |
|---|---|---|---|
| June 2024 Revenue | 218.13 | +39.8% | -11.1% (vs. May 2024) |
| Q2 2024 Revenue | 646.68 | +36.9% | +4.5% (vs. Q1 2024) |
| H1 2024 Revenue | 1,260.83 | +29.8% | N/A |
These figures reflect a market where demand for cutting-edge 3-nanometre (N3) and 5-nanometre (N5) process technologies is effectively insatiable, while demand for more mature nodes used in consumer electronics and automotive applications remains comparatively tepid.
A Widening Moat in a High-Stakes Game
TSMC’s operational success becomes even clearer when viewed against the struggles of its nearest competitors. According to market analysis from Counterpoint Research, TSMC commanded 62% of the global semiconductor foundry market in the first quarter of 2024. Samsung Foundry, its closest rival, held just 13% of the market, a share that has eroded amidst reports of persistent challenges in improving yields for its 3nm Gate-All-Around (GAA) process technology. This technological lead allows TSMC to maintain pricing power and attract cornerstone clients like Apple and NVIDIA for their most critical product launches.
Meanwhile, Intel Foundry Services (IFS) is pursuing an ambitious and costly turnaround strategy, aiming to deliver five process nodes in four years. While Intel’s progress is notable, IFS remains a distant third and must overcome significant execution hurdles to challenge TSMC’s deep, established relationships and proven manufacturing excellence. For the time being, the leading-edge foundry business is less of a competitive landscape and more of a demonstration of monopolistic dominance.
Systemic Importance and Second-Order Effects
The concentration of advanced semiconductor manufacturing within TSMC has profound implications. For its customers, securing capacity on its N3 and forthcoming N2 nodes is a matter of strategic survival, potentially leading to higher wafer prices and creating a clear distinction between the haves and have-nots in the technology sector. For equipment suppliers like ASML and Applied Materials, TSMC’s aggressive capital expenditure plans, including new fabs in Arizona, Japan, and Germany, translate into a predictable and robust order book.
However, this concentration also represents a systemic risk. Any disruption to TSMC’s operations, whether through geopolitical tension, natural disaster, or logistical failure, would send immediate shockwaves across the global economy. The firm’s monthly revenue reports have thus transcended being simple corporate filings; they are now a key indicator of global industrial health and geopolitical stability.
Navigating the Path Forward
Investors and market observers will be keenly watching TSMC’s upcoming quarterly earnings call for guidance on the third quarter and its outlook on end-market demand. The key question is whether the sequential dip in June was an anomaly or the first sign of a plateau in the explosive AI-driven growth cycle. The consensus view leans towards the former, but any downward revision to forecasts could trigger a significant market repricing.
Looking further ahead, the transition to the N2 process node, which will employ nanosheet transistor architecture, represents the next great hurdle and opportunity. As a closing speculative thought, the market may be underappreciating the immense execution risk associated with this technological shift for the entire industry. Should TSMC navigate the N2 ramp-up successfully while its competitors continue to lag, its effective monopoly on truly high-performance logic could trigger a new cycle of margin expansion in 2025-2026, a structural advantage not yet fully captured in its current valuation.
References
Counterpoint Research. (2024, June 13). Global Semiconductor Foundry Market Share: By Quarter. Retrieved from https://www.counterpointresearch.com/global-semiconductor-foundry-market-share/
MarketScreener. (2024, July 10). Taiwan Semiconductor Reports 27% Year-Over-Year Increase in June Revenue. Retrieved from https://www.marketscreener.com/quote/stock/TSMC-TAIWAN-SEMICONDUCTOR-6492349/news/Taiwan-Semiconductor-Reports-27-Year-Over-Year-Increase-in-June-Revenue-50478121/
StockMKTNewz. (2024, July 10). [Post showing stat/event]. Retrieved from https://x.com/StockMKTNewz/status/1810842763646849054
TSMC. (2024, July 10). TSMC Reports June 2024 Revenue. Retrieved from https://pr.tsmc.com/english/news/3246
