Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a key supplier to Apple and Nvidia, has raised its full-year Capex and revenue forecast, driven by demand for chips used in artificial intelligence (AI) applications.
Revenue Forecast Increase
TSMC has revised its 2024 revenue forecast to a growth rate of slight to above the mid-20 percent range in U.S. dollar terms, up from a previous projection of low to mid-20 percent growth. “AI is so hot; right now everybody, all my customers, want to put AI functionality into their devices,” said Chairman and CEO C.C. Wei during an earnings conference.
For the current quarter, TSMC expects revenue to rise by as much as 34 percent, projecting a range of $22.4 billion to $23.2 billion.
AI chip market
Revenue from AI semiconductors is expected to increase 33 percent to $71 billion in 2024, according to the latest forecast from Gartner.
The value of AI accelerators used in servers, which offload data processing from microprocessors, will reach $21 billion in 2024, and $33 billion by 2028, said Alan Priestley, VP Analyst at Gartner.
AI chips revenue from compute electronics will be $33.4 billion. AI chips revenue from automotive electronics will reach $7.1 billion. AI chips revenue from consumer electronics will be $1.8 billion in 2024.
Q2 Performance
In the second quarter, TSMC’s revenue rose by 32.8 percent to $20.82 billion. The company’s net profit for April to June climbed to T$247.8 billion ($7.60 billion), compared to T$181.8 billion a year earlier. Advanced technologies (7-nanometer and more advanced) accounted for 67 percent of total wafer revenue, with shipments of 3-nanometer chips making up 15 percent, 5-nanometer chips 35 percent, and 7-nanometer chips 17 percent.
Capital Expenditure Adjustments
TSMC has adjusted its capital expenditure plans for the year to between $30 billion and $32 billion, from a previous forecast of $28 billion to $32 billion. TSMC is investing $65 billion in three plants in Arizona and has additional new factories in operation or planning stages in Japan and Germany, involving partner investors, Reuters news report said.
TSMC CFO Wendell Huang highlighted that supply for leading-edge nodes, including 3nm and 5nm, would remain very tight next year. “Moving into the third quarter of 2024, we expect our business to be supported by strong smartphone and AI-related demand for our leading-edge process technologies,” Wendell Huang stated.
Baburajan Kizhakedath
