Taiwan Semiconductor Manufacturing Co. (TSMC) anticipates revenue growth of up to 30% in the June quarter, driven by a surge in AI development that is increasing demand for its advanced chips. This positive outlook comes after the company reported its first profit increase in a year, fueled by strong AI demand that has boosted growth at the world’s largest contract chipmaker.
In the June quarter, TSMC expects revenue to be between $19.6 billion and $20.4 billion, higher than earlier estimates of around $19.1 billion. The company attributes this growth to the rising demand for chips that accelerate artificial intelligence development, which is helping to offset the impact of a slowdown in the smartphone market.
TSMC’s market value has increased significantly since October 2022, reflecting investors’ confidence in the company’s positioning to benefit from the global AI development trend. The company has set a capital expenditure budget of $28 billion to $32 billion for 2024. In the March quarter, TSMC recorded a 9% rise in net income to NT$225.5 billion ($7 billion), outperforming expectations.
Looking ahead, TSMC expects revenue to grow by at least 20% for the full year as the semiconductor market rebounds. However, there are concerns about the sustainability of current levels of AI chip demand and the broader global macroeconomic environment. Additionally, uncertainty in the Taiwan Strait poses risks to the company’s operations.
Despite these challenges, TSMC remains optimistic about the long-term prospects of AI-focused chips, with AI revenue growing at a rate of 50% annually. While some investors caution against overreliance on AI chip demand, others see potential for continued growth in this area. The company’s performance is closely monitored by investors and analysts seeking to navigate
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