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How Does TSMC Make its Money?
Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest dedicated semiconductor foundry, manufacturing chips designed by companies like Apple, NVIDIA, AMD, and Qualcomm. TSMC produces the vast majority of the world’s most advanced chips at 3nm and 5nm process nodes, making it one of the most critical companies in the global technology supply chain. The company’s dominance in advanced manufacturing has made it a key beneficiary of the AI infrastructure buildout, as its chips power the GPUs and accelerators driving the AI revolution.
TSMC (TSM) Business Model
TSMC operates in the semiconductors sector. Below is a summary of TSMC’s revenue streams, how the company generates income, and the key financial metrics from its most recent annual report. This breakdown uses data from TSMC’s 2024 fiscal year filings with the SEC.
TSMC Competitors
TSMC’s key competitors and comparable public companies in the semiconductors sector include Nvidia, AMD, and Qualcomm. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how TSMC stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
TSMC’s total revenue in 2024 grew 25.7% year-over-year. Here is how their revenue breaks down by segment:
| Revenue Stream | 2024 | 2023 |
|---|---|---|
| High Performance Computing (HPC) | $44,400 | $30,500 |
| Smartphone | $30,500 | $24,200 |
| Internet of Things (IoT) | $5,200 | $5,500 |
| Automotive | $4,400 | $5,900 |
| Digital Consumer Electronics | $2,600 | $3,200 |
| Total | $87,100 | $69,300 |
All values in millions USD unless otherwise stated.
Income Statement Breakdown
Here is a summary of TSMC’s income statement comparing 2024 to 2023:
| Item | 2024 | 2023 |
|---|---|---|
| Total Revenue | $87,100 | $69,300 |
| Cost of Revenue | $37,400 | $30,900 |
| Gross Profit | $49,700 | $38,400 |
| Operating Expenses | $8,100 | $7,200 |
| Operating Income | $41,600 | $31,200 |
| Net Income | $36,200 | $26,900 |
All values in millions USD.
Key Financial Metrics
Gross Margin: 57.1% — This tells us how much profit TSMC keeps after direct costs of delivering their product or service.
Operating Margin: 47.8% — After accounting for all operating expenses like R&D, sales, and administration, this is the profit margin from core operations.
Revenue Growth: 25.7% — Year-over-year revenue growth from 2023 to 2024.
Is TSMC Profitable?
Yes, TSMC is profitable. The company reported net income of $36,200 on total revenue of $87,100.
TSMC (TSM) Financial Summary
TSMC (TSM) is a semiconductors company that generated $87,100 in total revenue in fiscal year 2024. The company earned $36,200 in net income, making it profitable. For a deeper look at TSMC’s revenue breakdown, business segments, and financial performance, review the detailed analysis above.