The following is a summary of the Taiwan Semiconductor Manufacturing Company Limited (TSM) Q4 2023 Earnings Call Transcript:

Financial Performance:

TSMC reported Q4 revenue increase of 14.4% sequentially in NT dollar or 13.6% in U.S. dollars due to ramp up of 3-nanometer technology.
Gross and operating margins decreased to 53% and 41.6% respectively, primarily due to margin dilution from 3-nanometer ramp.
Full year 2023 saw a decrease in revenue by 8.7% in US dollar terms to US$69 billion.
Cash and marketable securities at the end of Q4 stood at NT$1.7 trillion or US$55 billion.
Capital expenditures were US$30.45 billion, generating NT$1.7 trillion in operating cash flow and NT$292 billion in free cash flow.
In 2024, TSMC’s capital budget is expected to be between US$28 billion and US$32 billion, with capital expenditures expected to increase around 30% YoY.
Q1 2024 revenue is anticipated to be between US$18 billion and US$18.8 billion, representing a 6.2% sequential decline at the midpoint.

Business Progress:

TSMC’s revenue from Advanced Technologies (7-nanometer and below) accounted for 67% of wafer revenue, up from 53% in 2022.
Despite challenges leading to an 8.7% revenue decline in 2023, TSMC expects 2024 to be a growth year, with overall full-year revenue set to increase by low-to-mid 20% in U.S. dollar terms.
TSMC is ramping up volume production of their advanced 3-nanometer and 5-nanometer technologies, with 3-nanometer accounting for mid-teens percentage of total wafer revenue in 2024.
Plans to expand global manufacturing footprint include building specialty technology fabs in Japan, USA, and Germany, with start of production targeted for 2024/2025.
The company is focussed on maintaining robust AI-related demand and sees AI as a vast opportunity for growth.
Dr. C.C. Wei is slated to succeed the retiring chairman post the 2024 Annual Shareholders Meeting.