TSMC Achieves Record Sales Growth on AI Chip Demand
Taiwan Semiconductor Manufacturing Co. (TSMC) experienced a significant boost in revenue, reporting a 34.3% year-on-year increase for March, with total earnings reaching 195.2 billion new Taiwan dollars ($6.1 billion). This marks the company's most rapid monthly growth since November 2022. The surge has been largely attributed to the growing artificial intelligence (AI) chip market, with heightened demand for high-end chips and servers. TSMC's Q1 sales rose by 16% to NT$592.6 billion ($18.5 billion), surpassing analysts' expectations.
The world's largest contract semiconductor manufacturer, TSMC, is responsible for producing chips for major tech companies such as Apple and Nvidia. Despite facing competition from rivals like AMD and Intel, which have both introduced their AI chip offerings, TSMC has maintained a strong market position, as reflected in the company's share value increase of over 40% this year.
TSMC anticipates a continued upward trajectory in revenue, with projections suggesting a 23.7% increase for the year, which would reverse a slight decline experienced in 2023. The company has outlined a capital expenditure budget of $28 billion to $32 billion, aiming for at least a 20% revenue growth. However, some investors have expressed concerns about the long-term sustainability of the current demand for AI chips. Despite these cautionary perspectives, the firm's value has more than doubled since its low in October 2022, indicating strong investor confidence in the ongoing demand for advanced AI chips.
