(Yicai) Jan.19 -- Shares of Taiwan Semiconductor Manufacturing Company, the world’s most valuable chipmaker, surged after it said profit jumped in the final quarter of last year and forecast a “healthy growth year” ahead.

TSMC [NYSE: TSM] closed 10 percent higher at USD113.03 a share in New York yesterday. In pre-market trading today, they were up a further 1.1 percent as of 4.19 a.m. local time.

Net profit rose 13.1 percent to USD7.6 billion in the three months ended Dec. 31 from the third quarter, the Hsinchu-based company said in a trading report released yesterday. Revenue jumped 13.6 percent to USD19.6 billion, just above its own prediction of between USD18.8 billion and USD19.6 billion. 

Operating margin was 41.6 percent, higher than the guidance of 39.5 percent to 41.5 percent, TSMC added. However, fourth-quarter net profit and revenue dropped 19.3 percent and 1.5 percent, respectively, from a year earlier.

“2023 was a challenging year for the global semiconductor industry, but our technology leadership enabled TSMC to outperform the foundry industry,” Vice President and Chief Financial Officer Wendell Huang said on an earnings conference call. Revenue dropped 8.7 percent to USD69.3 billion last year from 2022, he added.

“Our business has bottomed out on a year-on-year basis and we expect 2024 to be a healthy growth year for TSMC, supported by the continued strong ramp up of our industry-leading 3-nanometer technologies, strong demand for 5-nanometer technologies and robust AI-related demand,” he noted.

TSMC predicts first-quarter revenue of between USD18 billion and USD18.8 billion, gross profit margin to jump between 52 percent and 54 percent, and operating profit margin of between 40 percent and 42 percent, Huang said.

“We forecast the overall semiconductor market, excluding memory, to increase by more than 10 percent,” he added.

TSMC’s high-performance computing will have the highest growth, Huang said. “We expect our business in the first quarter to be impacted by smartphone seasonality, partially offset by continued HPC-related demand.”

The firm’s capital spending will likely be between USD28 billion and USD32 billion this year, with the utilization rate to rise as business recovers.

Advanced technologies, defined as 7-nanometer and below, accounted for 67 percent of wafer revenue last quarter while making up 58 percent of the whole-year figure.

Regarding fourth-quarter revenue contribution by platform, HPC and smartphones had high growth and accounted for 43 percent each, while Internet of Things, automotive, and digital consumer electronics contributed 5 percent, 5 percent, and 2 percent, respectively. 

Smartphone and IoT contributions to the annual revenue fell 8 percentage points and 17 points to 38 percent and 8 percent, respectively, while that of DCE dropped 16 points. HPC accounted for 43 percent, remaining flat from a year earlier, and automotive added 6 percent, up 15 percent.

Editor: Martin Kadiev