(Bloomberg) – Taiwan Semiconductor Manufacturing Co. (TSM, 2330.TW) sees revenue growth in 2024 as better-than-expected quarterly results ease concerns about global chip demand and the sustainability of the AI hardware boom. The goal was raised.
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The leading chip maker for Nvidia Inc. (NVDA) and Apple Inc. (AAPL) now expects sales to increase 30% this year, a sharp upward revision from previous forecasts of up to mid-20% increases. are. This comes after TSMC reported higher-than-expected profits in its September quarter results. The company expects capital expenditures to be just over $30 billion in 2024, consistent with previous expectations.
TSMC’s revised outlook should help ease concerns that investors are misjudging demand for AI. Nvidia’s stock has soared more than 70% this year, outpacing many of Asia’s biggest tech companies, reflecting strong sales of Nvidia’s chips, which are critical to developing artificial intelligence.
Just a few months ago, in July, Taiwan’s largest company raised its revenue outlook for 2024, underscoring expectations for spending on AI infrastructure by companies such as Microsoft and Amazon.com. The steady introduction of artificial intelligence will also help boost iPhone sales. And other gadgets in the long run.
Investors were focused on a deviation in outlook after major supplier ASML Holding NV (ASML) reported orders for only half of what analysts expected. Semiconductor manufacturing equipment makers claimed that recovery in the auto, mobile and PC markets was slower than expected, impacting chip factory expansion plans. But AI remains a bright spot, company executives said.
TSMC on Thursday reported a better-than-expected 54% increase in September quarter profit.
Formal trading of the company’s American Depositary Receipts is expected to begin in a few hours, but ADRs rose about 4.5% on Robinhood’s overnight trading platform. TSMC is popular among retail investors in the US looking to bet on AI themes. Following the TSMC report, Japanese chip gear manufacturers such as Lasertec’s stock prices also posted losses in the Tokyo market.
Bloomberg intelligence statement
This comes despite the possibility that global manufacturing capacity growth will slow as TSMC’s largest tooling supplier, ASML, reports third-quarter results at half the expected level. TSMC’s short- to medium-term earnings outlook remains strong. Offsetting this is strong demand for TSMC’s 2- and 3-nanometer technology from Nvidia, AMD, Apple, and Qualcomm. TSMC’s superior production yields, increased EUV machine productivity, and leadership in 2.5D and 3D packaging provide further sales support.
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-Charles Shum, Analyst
The world’s largest advanced chip makers have become the biggest beneficiaries of the global race to develop artificial intelligence. Since the boom started with the introduction of OpenAI’s ChatGPT in late 2022, the company’s stock price has more than doubled. TSMC’s market capitalization briefly exceeded the $1 trillion mark in the United States.
But even before ASML, some investors were becoming cautious about the sustainability of global AI spending. They wonder whether big tech companies like Meta Platforms, Inc. (META). Alphabet Inc. (GOOG, GOOGL) will continue to invest heavily in AI chips and data centers without developing truly killer AI applications.
Data center overcapacity risks and geopolitical issues are worrying some investors. Bloomberg reported this week that Biden administration officials are discussing imposing country-specific caps on sales of advanced AI chips from Nvidia and other U.S. companies.
For now, TSMC appears to be moving forward with rapid international expansion.
The company plans to expand its factories in Europe, focusing on the artificial intelligence chip market, a senior Taiwanese official said. This is in addition to ongoing construction in Japan, Arizona and Germany.
—With assistance from Vlad Savov, Cindy Wang, and Mayumi Negishi.
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