Taiwan’s Chip Giant Defies Expectations with 39% Revenue Surge
Taiwan Semiconductor Manufacturing Co. (TSMC) has reported a remarkable 39% increase in quarterly revenue, alleviating concerns that spending on artificial intelligence (AI) hardware is slowing down. The company’s September-quarter sales reached NT$759.7 billion ($23.6 billion), exceeding analyst projections of NT$748 billion.
As the primary chipmaker for tech giants like Nvidia Corp. and Apple Inc., TSMC plays a crucial role in the global AI development surge. Its sales have more than doubled since 2020, driven by the launch of ChatGPT and the subsequent demand for AI server farms.
Despite recent skepticism about the sustainability of AI-driven growth, TSMC’s performance suggests that spending on AI infrastructure will remain robust. The company’s market capitalization briefly surpassed $1 trillion in July, and it has lifted its 2024 revenue growth outlook after beating estimates.
TSMC’s dominance in bespoke chipmaking, combined with Intel Corp. and Samsung Electronics Co.’s struggles in this area, is expected to maintain its market leadership and margins. The company’s focus on high-performance computing, which accounts for over half of its revenue, will continue to drive growth.
While some analysts have expressed concerns about Apple’s A18 chip orders due to soft demand for new iPhone 16s, robust orders from Nvidia and Intel are likely to offset any revenue shortfall for TSMC. The company’s plans to expand its advanced packaging capacity and potentially move forward with 2-nanometer node mass production will also support its growth trajectory.
As the AI landscape continues to evolve, TSMC’s position as a key player in the industry remains strong, with its shares more than doubling since the launch of ChatGPT.
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