- TSMC raised revenue forecasts for the year after beating estimates, signalling continued strength in AI-driven market.
- TSMC is one of the companies at the heart of an AI spending boom.
OUR TAKE
Taiwan Semiconductor Manufacturing Company (TSMC), a key player in the global semiconductor industry, has raised its revenue forecast, showing robust confidence amid the ongoing artificial intelligence (AI) boom. As the primary chipmaker for giants such as Apple and Nvidia, TSMC’s financial performance is closely watched as an indicator of technological and economic trends. The company’s recent financial adjustments reflect not only a strong quarter, but also its strategic position to capitalise on continued AI-driven demand.
—Heidi Luo, BTW reporter
What happened
Taiwan Semiconductor Manufacturing Company(TSMC) has raised its revenue forecasts for the year, reflecting strong demand amid a surge in spending on artificial intelligence. The company now expects sales to reach up to $23.2 billion in the current quarter, a figure that beats analyst predictions.
In addition, TSMC has updated its capital expenditure guidance to focus on the upper end of the $30 to $32 billion range, which represents a strategic push to support expected demand growth. As companies such as Microsoft and Baidu ramp up spending to improve their AI infrastructure, TSMC’s role becomes increasingly important.
TSMC’s optimism is supported by its key role in supplying chips to tech giants such as Apple and Nvidia, following a bumper June quarter that saw net income rise 36% to $7.6 billion.
Also read: TSMC soars 30%: AI chip craze fuels a profit leap in Q2
Also read: TSMC unveils A16 chip technology for faster AI chips
Why it’s important
Since the AI boom began in late 2022, shares in TSMC, the advanced chip manufacturing leader, have more than doubled to record highs, with the company’s market value briefly topping $1 trillion. However, investor sentiment took a hit after Donald Trump made cautious comments about defending Taiwan.
In addition, the US is considering tougher chip restrictions on China, which could trigger a global sell-off in tech stocks as investors ponder the implications for the world’s biggest semiconductor arena.
Caution on AI is now emerging in corners of the market, with Goldman Sachs warning this month that the biggest US tech companies may be spending too much on AI. Ahead of the results, Chaolien Tseng of SemiAnalysis warned that TSMC’s stock could take a hit if it doesn’t boost revenue growth to at least 25% by 2024.
TSMC’s guidance revisions also have broader market implications. As the global semiconductor market faces potential disruptions from geopolitical tensions and regulatory changes, TSMC’s performance and strategic decisions are critical. Its ability to maintain growth in the face of such challenges demonstrates its resilience and strategic foresight.
