Taiwan Semiconductor August sales indicate a potential 3Q beat

Taiwan Semi (TSM) reported its August revenue report on Tuesday, revealing a 33% increase year-over-year but a 2.4% decline from July.

TSMC said August 2024 revenue, on a consolidated basis, was approximately NT$250.87 billion, compared to NT$256.95 billion in July and NT$188.69 in August 2023.

Revenue for January through August 2024 totaled NT$1,773.97 billion, an increase of 30.8% compared to the same period in 2023.

Reacting to the revenue report, analysts at JPMorgan said in a note that the strong August sales indicate the company’s third quarter could beat guidance.

“We believe that Sep revenues are likely to remain flattish or grow slightly MoM helped by the ramp for iPhone processors and continued strength in
N3/N5 demand. We now believe that TSMC’s 3Q24 revenues could slightly exceed the high-end of its guidance range, due to strong N3 demand, continued demand for N5,” said the investment bank.

JPMorgan remains positive on TSM shares and expects Street consensus to continue to be revised up in the next 12 months due to better revenue
momentum and upside in GMs due to price hikes and better N3 yields.

Meanwhile, analysts at Bernstein said the monthly sales are tracking ahead compared to third-quarter consensus expectations.

“[The] monthly results are getting less predictive but the momentum thus far is worth noting,” said the firm. “TSMC’s revenue in Jan & Feb last year was also unusually strong but March was slow and the total 1Q23 revenue met only the low end of the guidance.”

“Putting all together, we project TSMC’s revenue in 2025 to grow by 24% YoY,” added the firm. “For 2026, Intel lowering outsourcing, if it happens as the current plan, will be a drag but N2 will enjoy AMD as an additional early user beyond Apple & should keep TSMC’s revenue growth at mid-teens% in 2026.”