TAIWAN Semiconductor Manufacturing Company’s (TSMC) revenue rose 33 per cent in August. Its sales reached NT$250.9 billion (S$10.2 billion), slowing from the previous month’s 45 per cent growth pace.
Still, this is a positive signal to investors betting on a smartphone market recovery and sustained demand for Nvidia’s artificial intelligence (AI) chips.
For the third quarter, analysts expect TSMC’s revenue to grow 37 per cent, extending a recovery from the post-Covid depths of 2023.
While just a month’s snapshot, the results could assuage concerns about whether the market has overestimated the durability of AI infrastructure spending.
Nvidia’s shares shed some US$279 billion on Sep 3 in their biggest single-day loss of value. This came after the company reported earnings that failed to live up to the loftiest expectations.
TSMC is on track to beat average projections for third quarter revenue by a slight margin, Bernstein analysts said.
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“If September follows the average seasonality of the past eight years, Q3 2024 revenue would come 5 to 6 per cent above both the guidance mid-point and consensus,” Mark Li, a Bernstein analyst, said.
More than half of the revenue of Taiwan’s largest company now comes from high-performance computing, a business segment driven by AI demand.
Nvidia’s go-to chipmaker is also the main manufacturer for the iPhone’s main processor. Apple on Monday (Sep 9) unveiled the iPhone 16, built for AI “from the ground up”, but with capabilities that will be gradually added to the device through software updates.
Wall Street is betting on mobile-device demand to bounce back.
TSMC offered an upbeat assessment of its business and prospects when it last reported earnings. In July, the world’s largest contract chipmaker raised its full-year growth outlook to beyond the maximum mid-20 per cent it had guided towards previously.
As the market improves, its chief executive officer is leading a major global expansion.
The company has flagged early progress in ramping up a project in Arizona, and broke ground a few weeks ago on a 10 billion-euro German facility. BLOOMBERG
