TSMC reported a stellar first quarter at its earnings call on Thursday. Consolidated revenue reached NT$592.64 billion and earnings per share hit NT$8.7, a new high for the quarter. Looking ahead, TSMC CEO C.C. Wei said the April 3 earthquake and the April power price hike could have a minor impact on TSMC’s gross margin in the second quarter.

TSMC announced exceptional figures in the first quarter. Consolidated revenue stood at NT$592.64 billion, and earnings per share at NT$8.7. As TSMC expands globally to meet client demand, it’s also facing higher costs associated with overseas factories.

Voice of C.C. Wei
TSMC CEO
We do encounter some kind of higher costs overseas, or even recently the inflation and electricity. We expect our customers to share some of the higher costs with us.

The chipmaker said it would evaluate ways to share the higher costs with clients. It also gave an update on its global expansion. Three fabs are under construction in the U.S. The first is slated to enter mass production in the first half of 2024. The second and third are expected to come online between 2028 and 2030. TSMC’s second fab in Japan’s Kumamoto prefecture is expected to start production in 2027. The company’s project in Dresden, Germany will mostly focus on automobile and industrial chips. TSMC is also facing higher costs in Taiwan, after electricity rates rose on April 1.

Voice of Wendell Huang
TSMC senior vice president
Primarily due to impact of the earthquake on April 3, as just discussed, and higher electricity costs in Taiwan, TSMC’s electricity price in Taiwan was increased by another 25% starting April 1 this year. This is expected to take out 70 to 80 basis points from our second-quarter growth mark.

The April 3 earthquake and rising electricity bills are expected to have a minor effect on gross margin. But with its long-term outlook still strong, TSMC’s leadership in the sector remains unthreatened.

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