(Bloomberg) — Taiwan Semiconductor Manufacturing Co. expects sales to rise as much as about 30% this quarter, reflecting an AI development boom that is increasing demand for the advanced chips it makes for Nvidia and others. There is.
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The forecast is expected to exceed expectations as growth at the world's largest contract chip maker recovers due to strong demand for AI. The company, which is a major chip maker for Nvidia and Apple, expects June quarter sales to be between $19.6 billion and $20.4 billion, compared with expectations of about $19.1 billion.
Taiwan's largest company last week reported its fastest sales growth since 2022, suggesting demand for chips to accelerate artificial intelligence development is starting to offset the impact of the smartphone market downturn. Apple, which accounts for about a quarter of its 2023 sales, started the year with a sharp drop in iPhone sales in China.
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TSMC has gained around $340 billion in market capitalization since its October 2022 low, and is betting on becoming one of the clearest winners in the global AI development boom. At the beginning of the year, the company set its 2024 capital investment budget at $28 billion to $32 billion. On Thursday, the company posted a better-than-expected 9% rise in net profit for the March quarter to NT$225.5 billion ($7 billion).
The company said in January that it expects sales to increase by at least 20% this year as the broader semiconductor market recovers, although uncertainty remains given global macroeconomic fluctuations. Major supplier ASML Holding NV, the sole provider of the world's most advanced chip manufacturing equipment, reported Wednesday that first-quarter bookings were down 22%.
Over the long term, investors expect AI-focused chips to gradually account for a larger share of revenue. TSMC's AI revenue is growing at a rate of 50% annually, the company announced in January. Still, some investors have warned that current levels of demand for AI chips are unsustainable in the long term. Some remain cautious given the uncertainty surrounding the Taiwan Strait, a narrow stretch of water between China and the islands it considers part of its territory.
–With assistance from Ville Heiskanen, Gao Yuan, and Mayumi Negishi.
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