TAIPEI (Reuters) – TSMC, the world's largest chipmaker and a key supplier to Apple and Nvidia, is riding a wave of demand for semiconductors used in artificial intelligence (AI) applications, with sales up to 30% in the second quarter. It was predicted that this could increase by %.
With demand for AI processors surging, executives at Taiwan Semiconductor Manufacturing Co. (TSMC), which investors are watching as a leader in the chip industry, made clear just how strong the demand has been. .
TSMC shares in New York fell less than 1% in premarket trading. The company's Taipei-listed shares have risen more than 30% since the beginning of the year, but the gain was less than 1%.
“Nearly every AI innovator is working with TSMC to address the insatiable AI-related demand for energy-efficient computing power,” CEO CC Wei said during the company's first quarter earnings call. .
“The demand for AI-related data centers is very strong,” he said, adding that the transition from traditional servers to AI servers is “favorable” for TSMC.
TSMC has benefited from the AI wave, weathering the waning demand for electronics caused by the coronavirus pandemic and pushing the company's stock price to record levels.
According to the company, AI servers will account for 2024 revenue in the low teens, more than double what it was last year, and that number will rise to more than 20% by 2028.
It added that demand for automotive chips will decline this year compared to previous growth forecasts.
Looking ahead, TSMC expects its second quarter business to be supported by strong demand for its industry-leading 3 nanometer (nm) and 5nm technologies, but that strength will be partially offset by weaker smartphone demand. He said he is doing so.
The company said its guidance for capital spending this year remained unchanged at $28 billion to $32 billion, compared with $30.45 billion last year, with 70 to 80 percent of that going to advanced technology.
The company said it expects 2024 sales to increase in the low to mid 20% range in US dollar terms.
“Looking to 2024, macroeconomic and geopolitical uncertainties continue, which could further impact consumer confidence and end-market demand,” TSMC said in a statement. Ta.
The online earnings conference was suspended for about 15 minutes shortly after it began due to technical issues that prevented investors and analysts from accessing it.
Net profit increased
TSMC announced early Thursday that its first-quarter net profit rose 9%, beating market expectations, driven by strong demand for advanced chips.
TSMC's net profit for the January-March period was NT$225.5 billion ($6.98 billion), up from NT$206.9 billion in the same period last year.
This profit beat the LSEG SmartEstimate of NT$218.1 billion, which emphasizes more consistently accurate analyst forecasts.
TSMC, Asia's most valuable listed company, said first-quarter revenue rose 13% year-on-year to $18.87 billion, beating the company's previous estimate of $18.0 billion to $18.8 billion. . The company announced last week that its first quarter sales amounted to NT$592.64 billion.
TSMC said capital spending in the first quarter was $5.77 billion, compared to $5.24 billion in the fourth quarter of 2023.
TSMC's Taipei-listed stock has risen 36% since the beginning of the year. Stocks were flat on Thursday ahead of the earnings release, while the benchmark index rose 0.4%.
The company, which is spending billions of dollars building new factories overseas including the US, Japan and Germany, said expanding its global manufacturing footprint was “strategically important” and in the first half of the year He said that production is on track. In 2025.
Last week, the company announced it would expand its investment plans for chip production in Arizona by $25 billion to $65 billion and add a third manufacturing facility in Arizona by 2030.
The announcement followed a statement from the U.S. Department of Commerce that it would give TSMC a $6.6 billion subsidy and up to $5 billion in low-cost government loans for its Arizona plant.
(Reporting by Yimou Lee and Faith Hung; Additional reporting by Ben Blanchard; Editing by Anne Marie Roantree, Shri Navaratnam and Christian Schmollinger)
