Taiwan Semiconductor Manufacturing Company (TSMC), responsible for producing the majority of the world’s advanced chips, is set to see a significant profit boost due to the surge in demand driven by the generative artificial intelligence boom. Analysts from FactSet expect TSMC to report a net income of NT$236.4 billion (approximately $7.3 billion) for the second quarter of 2024, reflecting a 30% increase compared to the same period last year, when the profit was NT$181.8 billion. With exclusive partnerships with AI chip designer Nvidia and Apple, TSMC’s stock has risen by 82.9% this year. The company will announce its second-quarter earnings on Thursday.
In June, TSMC reported a 30% year-over-year increase in its May net revenue, amounting to $7.1 billion. Although this was a 2.7% decline from April, the company’s revenue from January to May experienced a year-over-year increase of 27%. Earlier that month, TSMC chairman and CEO C.C. Wei reiterated projections that the chip market, excluding the memory sector, would grow by 10% this year, spurred by the AI boom.
Back in April, TSMC anticipated its second-quarter sales could increase by as much as 30%, with customers like Nvidia and Apple contributing to this growth. The company set its second-quarter revenue expectations between $19.6 billion and $20.4 billion, surpassing the previous estimate of $19.1 billion. Additionally, TSMC plans to spend up to $32 billion this year, mostly on advanced technologies.
“Moving into the second quarter of 2024, we expect our business to be supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” stated Wendell Huang, TSMC’s senior vice president and chief financial officer in April.
Earlier this year, TSMC secured $6.6 billion in grants through the federal CHIPS and Science Act to back its first major U.S. chipmaking hub in Phoenix. TSMC currently has two chipmaking facilities in Arizona, slated to begin production in 2025 and 2028. The new funding will help construct a third facility, raising the company’s investment from $40 million to $65 million.