TSMC, the world’s largest contract chipmaker, has raised its full-year revenue forecast, citing a surge in demand for chips used in artificial intelligence. Despite this optimistic outlook, TSMC has dismissed the idea of a joint venture factory in the United States.
The company, a key supplier for tech giants like Apple and Nvidia, has benefited from the global AI boom, offsetting a decline in pandemic-driven electronics demand. On July 18, TSMC reported a net profit that exceeded market expectations and raised its 2024 revenue forecast to a growth rate of slightly above the mid-20% range in U.S. dollar terms, up from an earlier prediction of low to mid-20% growth.
Chairman and CEO C.C. Wei highlighted the intense interest in AI, stating, “AI is so hot; right now everybody, all my customers, want to put AI functionality into their devices.” Following the announcement, TSMC’s U.S.-listed shares rose 3.3% in pre-market trading, although its Taiwan-listed shares closed down 2.4% due to recent political tensions.
In response to recent comments by U.S. Republican presidential candidate Donald Trump about Taiwan’s chip business, TSMC reaffirmed its commitment to existing expansion plans without considering a U.S. joint venture. Wei emphasized that TSMC’s strategy remains unchanged, with ongoing expansions in Arizona, Japan, and potentially Europe.
TSMC is investing $65 billion in three plants in Arizona and has new factories in Japan and Germany. Despite the tight supply of advanced chips, including 3nm and 5nm nodes, the company is working to increase capacity to meet growing demand. For the current quarter, TSMC projects revenue between $22.4 billion and $23.2 billion, up to 34% higher than previous figures.
The company has adjusted its capital expenditure plans for the year to $30 billion to $32 billion, up from a previous forecast of $28 billion to $32 billion. TSMC’s second-quarter revenue climbed 33% year-on-year to $20.8 billion, surpassing earlier forecasts.
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