3nm Earnings Share Jumps to fifteen%, 5nm Overtakes 7nm For 2023

Taiwan Semiconductor Manufacturing Co. launched its This autumn’2023 and full yr 2023 monetary outcomes this week. And together with a have a look on the monetary state of the corporate on account of it enters 2024, the corporate’s earnings data furthermore presents a latest have a look on the utilization of their assorted fab nodes. Of particular curiosity, with TSMC ramping up manufacturing of chips on its N3 (3 nm-class) course of know-how, N3 (aka N3B) has already reached the purpose the place it accounts for 15% of TSMC’s earnings in This autumn 2023. It is a very quick – albeit not doc quick – earnings ramp.

Contained in the fourth quarter of 2023, product gross sales of wafers processed utilizing N3 accounted for 15% of TSMC’s full wafer earnings, whereas earnings of N5 and N7 accounted for 39% and 17% respectively. As regards to {{{dollars}}}, N3 earnings for TSMC was $2.943 billion, N5 product gross sales totaled $6.867 billion, and N7 earnings reached $3.3354 billion. Sometimes, superior utilized sciences (N7, N5, N3) commanded 67% of TSMC’s earnings, whereas the bigger grouping of FinFET-based course of utilized sciences accounted for 75% of the corporate’s full wafer earnings.

It’s noteworthy that earnings share contributions made by system-on-chips (SoCs) for smartphones and high-performance computing (a imprecise time interval that TSMC makes use of to make clear every issue from recreation consoles to notebooks and from workstations to datacenter-grade processors) had been equal in This autumn 2023: 43% every. Automotive chips accounted for five%, and Internet-of-Factors chips contributed one totally different 5%.

“Our fourth quarter enterprise was supported by the continued sturdy ramp of our industry-leading 3-nanometer know-how,” stated Wendell Huang, VP and Chief Monetary Officer of TSMC. “Shifting into first quarter 2024, we depend on our enterprise to be impacted by smartphone seasonality, partially offset by continued HPC-related demand.”

To place TSMC’s N3 earnings share ramp into context, we have to take a look at it to the ramp of the foundry’s previous-generation all-new node: N5 (5 nm-class), which entered high-volume manufacturing in mid-2020. TSMC started to acknowledge its N5 earnings in Q3 2020 and the manufacturing node accounted for 8% of the corporate’s product gross sales as soon as extra then, which totaled $0.97 billion. Contained in the second quarter of its availability (This autumn 2020), N5 accounted for 20% of TSMC’s earnings, or $2.536 billion.

There’s a vital catch about TSMC’s N5 ramp in 2020 that muddles comparisons a bit, nevertheless. The world’s largest contract maker of chips bought boatload of N5-based system-on-chips to Huawei on the time (provide them bodily ahead of the U.S. sanctions in course of the corporate grew to change into setting pleasant in September, 2020) together with Apple.  In distinction, it’s broadly believed that Apple is the one shopper to make the most of TSMC’s N3B know-how as a result of prices. Which signifies that, even with the fast ramp, TSMC has fewer buyers all through the early days of N3 than they did in N5, contributing to the slower ramp for N3.

As for all the yr, N3 wafer earnings account for six% of TSMC’s full wafer earnings in 2023. Throughout the meantime, N5 earnings has lastly overtaken N7 earnings in FY2023, after being edged out by N7 in FY2022. For 2023, N5 wafers accounted for 33% of TSMC’s earnings, and N7 wafers had been answerable for 19% of the corporate’s earnings.

TSMC’s fourth quarter earnings totaled $19.62 billion, which represents a 1.5% year-over-year lower, or a quarterly enhance of 13.6% over Q3 2023. Throughout the meantime, the corporate shipped 2.957 million 300-mm equal wafers in This autumn 2023, up 1.9% sequentially. The corporate’s gross margin for the quarter was 53.0%, working margin was 41.6%, and net revenue margin was 38.2%.

TSMC expects earnings in Q1 2024 to be between $18.0 billion and $18.8 billion, whereas gross margin is projected to be between 52% and 54%.