TSMC Forecasts Strong Growth in Second Quarter with Surge in Demand for AI Chips
TSMC, the world’s largest chipmaker, is anticipating a significant increase in sales for the second quarter of the year, with forecasts indicating a rise of up to 30%. The surge in demand for semiconductors used in artificial intelligence (AI) applications is the driving force behind this growth.
According to CEO C.C. Wei, almost all AI innovators are working with TSMC to meet the demand for energy-efficient computing power. As a result, AI servers are expected to account for a substantial portion of TSMC’s revenue in the coming years.
However, despite the overall positive outlook, demand for auto chips is expected to decline this year, contrary to previous growth estimates. TSMC is banking on strong demand for its 3nm and 5nm technologies in the second quarter, although this may be offset by sluggish smartphone demand.
To support its growth plans, the company intends to maintain capital spending between $28 billion to $32 billion this year. TSMC also anticipates revenue to rise in the low to mid-20% range in U.S. dollar terms by 2024.
In the first quarter, TSMC reported a 9% increase in net profit, surpassing market expectations. The company is also looking to expand its production facilities in the United States, Japan, and Germany. In particular, TSMC is on track to begin production in Arizona by the first half of 2025, with plans to invest an additional $25 billion for further expansion by 2030.
Overall, TSMC is poised for a period of growth and expansion, driven by the increasing demand for AI chips and advanced semiconductor technologies.
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