TSMC, the world’s largest contract chipmaker situated in Taiwan, has revised its full-year revenue forecast upwards due to robust demand for chips powering artificial intelligence applications, despite challenges and political remarks affecting its stock performance.
The company, a key supplier to tech giants like Apple and Nvidia, reported better-than-expected net profit on Thursday, reinforcing its position amidst the global AI boom. TSMC now anticipates revenue growth for 2024 to be slightly above the mid-20% range in U.S. dollar terms, up from a previous forecast of low to mid-20% growth.
Chairman and CEO C.C. Wei attributed this optimistic outlook to the soaring popularity of AI technology, stating, “AI is so hot; right now everybody, all my customers, want to put AI functionality into their devices.” This trend has helped offset the slowdown in pandemic-driven electronics demand, demonstrating TSMC’s adaptability and market resilience.
Despite these positive developments, TSMC’s Taiwan-listed shares closed down 2.4% before the earnings announcement, continuing a trend exacerbated by recent remarks from U.S. Republican presidential candidate Donald Trump. Trump’s comments implied criticism of Taiwan’s role in the global semiconductor supply chain, which impacted market sentiment regarding TSMC’s stock.
Addressing questions about potential joint ventures in the U.S. following Trump’s comments, Wei clarified that TSMC has no plans to deviate from its current expansion strategy. The company remains committed to its $65 billion investment in Arizona, along with ongoing projects in Japan and prospective ventures in Europe, underscoring its strategic focus amid geopolitical tensions.
“We continue in our current practice,” Wei affirmed, emphasizing continuity in TSMC’s global expansion efforts despite external pressures. The firm’s dedication to enhancing production capacity is critical as demand for advanced chips, including its cutting-edge 3nm and 5nm nodes, is expected to remain exceedingly high through next year and beyond.
CFO Wendell Huang echoed these sentiments regarding supply constraints, acknowledging that meeting customer demands for leading-edge nodes will remain challenging into 2025. Huang emphasized TSMC’s intensive efforts to ramp up capacity, ensuring sustained support for its global clientele amid a highly competitive semiconductor landscape.
TSMC’s ability to navigate geopolitical tensions while capitalizing on AI-driven market opportunities will be pivotal. The company’s robust financial performance and strategic investments underscore its pivotal role in the semiconductor industry’s evolution, positioning it favorably despite external uncertainties.
