Taiwan Semiconductor Manufacturing Company (TSMC), a leading producer of advanced chips globally, is expected to see a 30% increase in profit year-over-year due to high demand spurred by the generative artificial intelligence boom. FactSet analysts estimate TSMC will report a net income of NT$236.4 billion ($7.3 billion) for the second quarter of 2024, up from NT$181.8 billion the previous year. Shares of TSMC have risen 82.9% so far this year, with the company benefiting from its exclusive partnership with AI chip designer Nvidia and its role as a chip fabricator for Apple.
TSMC’s net revenue in May 2023 saw a 30% annual increase, reaching $7.1 billion, though this marked a 2.7% decrease from April. From January to May, the company’s revenue increased by 27% compared to the same period the previous year. TSMC’s chairman and CEO, C.C. Wei, projected 10% growth for the chip market in 2023, excluding the memory sector, driven by the rise in AI technology.
In April, TSMC anticipated its second-quarter sales could climb by up to 30%, exceeding initial projections, thanks to key clients like Nvidia and Apple. The company set its revenue expectations for the second quarter at between $19.6 billion and $20.4 billion, surpassing the former estimate of $19.1 billion. TSMC also planned to invest up to $32 billion this year, primarily focused on advancing technologies.
For the second quarter of 2024, TSMC expects strong demand for its leading 3nm and 5nm technologies, although this will be partially offset by seasonal fluctuations in the smartphone market, according to Wendell Huang, TSMC’s senior vice president and CFO.
Additionally, TSMC received $6.6 billion in grants from the federal CHIPS and Science Act to support its first major U.S. chipmaking hub in Phoenix. The company plans to use some of this funding to build a third facility, increasing its investment in Arizona from $40 million to $65 million. TSMC already operates two chipmaking plants in the state, set to commence production in 2025 and 2028.