TSMC's business update and launch of a new Strategy

What looks like a modest market expansion strategy is all but modest.

As usual, when TSMC reports, the Semiconductor industry gets a spray of insights that help understand what goes on in other areas of the industry. This time, TSMC gave more insight into their new Foundry 2.0 strategy, which will be covered later in this post.

The Q2-2024 result was a new revenue record indicating that the Semiconductor industry is out of the downcycle and ready to aim for new highs.

However, TSMC's gross and operating profits have not returned to the same levels as last time, when revenue was over $20B/qtr. This is a new situation that needs to be uncovered.

Semiconductor manufacturing companies need to spend significant capital every quarter to maintain and service their equipment. Spending at the maintenance capex level ensures that manufacturing capacity does not decline.