Taiwan Semiconductor Manufacturing Company (TSMC), the leading producer of the world’s advanced chips, is anticipating a significant profit boost of 30% year-over-year due to the booming demand in generative artificial intelligence. Analysts from FactSet expect TSMC to report a net income of NT$236.4 billion ($7.3 billion) for the second quarter of 2024, an increase from NT$181.8 billion a year earlier. TSMC, which partners with AI chip designer Nvidia and manufactures chips for Apple, has seen its shares climb 82.9% this year. The company will disclose its second-quarter earnings on Thursday.
In May, TSMC reported a 30% year-over-year rise in net revenue to $7.1 billion, despite a 2.7% decline from April. From January through May, the company’s revenue increased by 27% compared to the previous year. Chairman and CEO C.C. Wei has reiterated that the chip market, excluding memory, is expected to grow by 10% this year, driven largely by AI advancements.
In April, TSMC forecasted a potential 30% rise in second-quarter sales, fueled by demand from clients like Nvidia and Apple. The company projected its second-quarter revenue to range between $19.6 billion and $20.4 billion, exceeding earlier estimates of $19.1 billion. TSMC also announced plans to invest up to $32 billion this year, primarily in advanced technologies.
Wendell Huang, TSMC’s senior vice president and chief financial officer, stated in April, “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.”
Earlier this year, TSMC secured $6.6 billion in grants through the federal CHIPS and Science Act to advance its chipmaking hub in Phoenix. The company already has two chipmaking facilities in Arizona, slated to commence production in 2025 and 2028. The new funding will help build a third facility, raising TSMC’s total investment from $40 million to $65 million.