Taiwan Semiconductor Manufacturing Company (TSMC) raised its 2024 revenue forecast, citing strong demand for chips for AI applications. The world's largest contract chipmaker now sees growth in the mid-20s in U.S. dollar terms, better than its previous forecast. The adjustment came after TSMC reported better-than-expected second-quarter 2024 profits.
TSMC announced in its earnings report: Reutersalso touched on speculation about possible joint ventures, particularly in the U.S. The company reaffirmed its commitment to its current global expansion strategy, which includes significant investments in Arizona, Japan and Europe. This stance on independent growth comes amid ongoing discussions about the global distribution of semiconductor manufacturing capacity.
TSMC Chairman and CEO CC Wei painted a vivid picture of the current situation, saying, “AI is very popular. Now everyone – my customers – wants to build AI capabilities into their devices.”
TSMC's success is intrinsically tied to the global AI boom that has helped offset a decline in demand for electronics during the pandemic. As a key supplier to tech giants such as Apple and Nvidia, TSMC is at the center of the AI revolution, producing the advanced chips that power everything from smartphones to data centers.
This is reflected in TSMC's impressive performance based on its recent financial results, with net profit for the April-June period soaring to NT$247.8 billion (US$7.6 billion), beating market expectations. This strong growth, despite global economic uncertainty and geopolitical tensions, highlights TSMC's resilience and strategic positioning in the semiconductor industry.
The company's optimistic outlook continues into the near future, with Chief Financial Officer Wendell Huang predicting strong demand for TSMC's cutting-edge process technology, particularly in smartphone and AI-related applications. This positive outlook is backed by concrete plans: TSMC adjusted its capital expenditures this year to $30 billion to $32 billion, signaling its commitment to expanding production capacity and maintaining its technological advantage.
But TSMC's road is not without challenges. The company faces intense pressure to meet soaring demand for advanced chips, with Wei describing the situation as “very tough.” TSMC is working to ramp up production capacity to meet customer needs beyond 2026.
Despite these challenges, TSMC remains focused on its global expansion strategy. The company is investing heavily in new facilities, including a $65 billion investment in three factories in Arizona, as well as projects in Japan and future Europe. This global footprint allows TSMC to meet demand around the world and strategically position itself in an increasingly complex geopolitical landscape.
Interestingly, TSMC has steadfastly rejected the idea of a joint venture in the United States, despite recent comments from American politicians about Taiwan's dominance in the semiconductor industry. Wei emphasized TSMC's independence and strategic vision, and reaffirmed the company's commitment to its expansion plans.
As TSMC continues to push the boundaries of semiconductor technology, its impact reaches far beyond the balance sheet: the company's innovations are driving advancements in AI, powering the next generation of smart devices and shaping the future of technology around the world.
In conclusion, TSMC's latest financial results and optimistic forecast paint a picture of a company at the forefront of the AI revolution. As the world becomes increasingly reliant on advanced computing power, TSMC's role in providing the chips that enable it is more important than ever. With ambitious expansion plans and an unwavering focus on innovation, TSMC is not only riding the AI wave, it's helping to create it.
Also see: Global semiconductor shortage: How does the US plan to solve the talent shortage?
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