TSMC is likely to see its 3nm and 5nm nodes generate more than NT$1 trillion (US$31.02 billion) in total revenue in the first three quarters of this year, as the foundry house's sales momentum remains strong in the third quarter of 2024.
TSMC hit record quarterly sales in the second quarter of 2024, primarily due to full-capacity production for its 3nm and 5nm process families. These two nodes collectively accounted for 50%, or NT$336.7 billion, of the foundry company's second-quarter 2024 sales, contributing to total sales of NT$609.3 billion for the first half of 2024.
With sales for the third quarter projected to grow 11.43% and utilization rates maintaining 100%, revenues from the 3nm and 5nm process families are expected to reach NT$377 billion, bringing the total for the first three quarters of the year to more than NT$1 trillion.
TSMC has also seen utilization rates of 7nm and 28nm processes increase to 80%. Equipment for these two processes has already been fully depreciated and amortized, enhancing TSMC's profitability.
While overall recovery for the global semiconductor industry was slow in the first half of 2024, TSMC's sales outperformed, driven by strong momentum from the AI chip sector.
3nm node contributes half of sales
Among the chief sales contributors, the 3nm family, which commanded a manufacturing quote of almost US$20,000 per wafer, generated 15%, or NT$101 billion of the foundry's total second-quarter sales, while the 5/4nm family accounted for 35% or NT$235.7 billion.
In the first quarter, the 3nm and 5nm families accounted for 9% and 37% of overall sales, respectively.
TSMC anticipates its third-quarter 2024 sales to reach NT$754 billion, with at least 50% derived from the 3nm and 5nm families.
Sources from the equipment supply chain noted that rising sales and profits provide capex support for TSMC's capacity expansions and node advancements. To date, only TSMC has been able to see returns from substantial investments in 3/5nm processes, the sources added.
TSMC's substantial investments in capacity expansion
TSMC is expected to maintain full utilization for its 3/5nm capacity through the end of the year amid strong demand from customers. The foundry house has increased its capex outlook for 2024 to US$30-32 billion.
Meanwhile, Intel has reduced its 2024 capex budget by 20% to US$25-27 billion, and will further reduce it to US$20-23 billion for 2025, despite its commitment to revitalize its chip manufacturing capability.
The sources indicated TSMC is outperforming Samsung Electronics and Intel in the 3/5nm competition. The Taiwan-based foundry is also making significant progress in advancing to 2nm, and has already received order commitments from customers for this node.
TSMC's 2nm manufacturing processes will be located at its F20 site in Baoshan, Hsinchu Science Park (HSP), and F22 site in Nantze, Kaohsiung. The P1 fab at F20 is scheduled to start production ramp-up in the fourth quarter of 2025, with a goal to reach a monthly capacity of almost 30,000 wafers. The Kaohsiung plant will aim to increase monthly capacity to more than 30,000 wafers in 2026.
F20 will comprise four wafer fabs: P1 and P2 will be for 2nm, while P3 and P4 for A14 (1.4nm) will see equipment installation in the first half of 2027 at the earliest. The Kaohsiung site will have five wafer fabs: P1, P2, and P3 will be for 2nm, while P4 and P5 for A14 will see equipment installation in 2028.
Article translated by Rodney Chan
