Taiwan Semiconductor Manufacturing Co. (TSMC) has raised its revenue growth forecast for 2024, signaling strong confidence in the ongoing AI hardware surge. Following quarterly results that exceeded expectations, TSMC now anticipates a revenue increase of approximately 30% in US dollar terms this year, a significant jump from its earlier estimate of mid-20% growth.
This positive outlook follows a strong performance in the September quarter, where TSMC reported a remarkable 54% increase in net profit, totaling NT$325.3 billion ($10.1 billion). The company is also projecting revenue of $26.1 billion to $26.9 billion for the upcoming quarter, surpassing analyst predictions of $24.9 billion.
TSMC’s CEO, C.C. Wei, expressed optimism about the demand for chips, stating, “The demand is real, and I believe it’s just the beginning.” His sentiments come in the wake of concerns triggered by ASML Holding NV, which reported significantly fewer orders than anticipated, raising questions about the sustainability of the semiconductor and AI markets.
Investors responded positively to TSMC’s news, with its American depositary receipts climbing over 6% in pre-market trading. Nvidia’s stock also saw a boost, reflecting the interconnected nature of the semiconductor market.
TSMC’s shares have surged more than 70% this year, thanks largely to the strong sales of Nvidia chips, essential for AI development. The company recently raised its outlook for 2024, emphasizing expectations for continued spending on AI infrastructure from major players like Microsoft and Amazon.
Despite some skepticism from investors about the longevity of AI spending, TSMC appears well-positioned to navigate any downturns in the sector. Ben Barringer, a technology analyst, noted, “TSMC is not just an AI machine. They are much better positioned than both Intel and Samsung, which have faced their own challenges.”
Looking ahead, TSMC is also planning significant international expansion, with new plants in Europe and ongoing construction in Japan and Arizona. The company is set to capitalize on the booming market for AI chips, anticipating revenue from AI server processors to triple this year, making up a mid-teens percentage of total sales in 2024.
As TSMC continues to lead the charge in semiconductor technology, its growth and resilience in the face of global challenges highlight its pivotal role in the AI revolution.
hii Aditi Sahu this side..
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