Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of advanced chips, is poised to see a 30% boost in profits year-over-year, driven by the surge in demand amid the generative artificial intelligence boom.
The Taiwanese chipmaker is expected to report a net income of NT$236.4 billion ($7.3 billion) for the second quarter of 2024, according to FactSet analysts’ estimates. This marks a significant increase from the NT$181.8 billion profit reported during the same period last year. Benefiting from its exclusive partnership with AI chip designer Nvidia and fabrication services for Apple, TSMC’s shares have surged by 82.9% this year. The company will reveal its second-quarter earnings on Thursday.
In May, TSMC reported a 30% year-over-year increase in net revenue to $7.1 billion, although this represented a 2.7% decline from April. For the period from January to May, the company’s revenue grew by 27% compared to the previous year. TSMC chairman and CEO, C.C. Wei, reaffirmed earlier this month that the chip market, excluding the memory sector, is projected to see a 10% growth this year fueled by the AI boom.
In April, TSMC forecasted second-quarter sales could rise by up to 30%, exceeding initial projections, thanks to customers like Nvidia and Apple. The company set revenue expectations between $19.6 billion and $20.4 billion for the second quarter, higher than the previously anticipated $19.1 billion. TSMC also maintains its plan to invest up to $32 billion this year, with the majority allocated for advanced technologies.
“For the second quarter of 2024, we expect strong demand for our industry-leading 3nm and 5nm technologies to support our business, though this will be partially offset by continued smartphone seasonality,” said Wendell Huang, TSMC’s senior vice president and chief financial officer, in a statement in April.
Additionally, TSMC secured $6.6 billion in grants through the federal CHIPS and Science Act earlier this year to support the development of its major U.S. chipmaking hub in Phoenix. The company already has two facilities in Arizona set to begin production in 2025 and 2028 and plans to use part of the funding for a third facility, increasing its investment from $40 million to $65 million.