Taiwan Semiconductor Manufacturing Co.’s revenue rose 33% in August to NT$250.9 billion ($7.8 billion). This signals a positive outlook for investors banking on a smartphone market recovery and sustained demand for Nvidia Corp.’s AI chips. The growth was slower than the previous month’s 45% pace.
However, analysts expect TSMC’s revenue to grow by 37% in the third quarter, extending a recovery from the post-Covid depths of 2023. Taiwan’s largest company now makes more than half of its revenue from high-performance computing, a segment driven by AI demand. Nvidia’s chief chip manufacturer is also the main producer for the iPhone’s primary processor.
Apple Inc. recently unveiled the iPhone 16, designed with built-in AI capabilities that will be expanded through software updates. Wall Street is optimistic about a rebound in mobile device demand.
Bloomberg Intelligence indicates that Apple’s adoption of Wi-Fi 7 on the iPhone 16 and 16 Pro will likely accelerate technology penetration.
tsmc reports 33% revenue growth
This will boost demand for TSMC’s N6 (7-nanometer) and N4 (5-nanometer) nodes, which are already used by Broadcom, MediaTek, and others for Wi-Fi 7 chip production.
TSMC offered an optimistic assessment of its business and prospects in its last earnings report. In July, the world’s largest contract chipmaker raised its full-year growth outlook beyond the previously guided maximum mid-20% range. As market conditions improve, Chief Executive Officer C.C. Wei is leading a significant global expansion.
The company has reported early progress in its Arizona project, is considering a third fab in Japan, and recently broke ground on a €10 billion German facility. The continued demand for AI and high-performance computing appears to bolster TSMC’s revenue prospects moving forward. The company’s stock is included in the SPDR S&P Emerging Asia Pacific ETF and the ProShares Nanotechnology ETF.
TSMC’s Chief Financial Officer, Wendell Huang, stated that the second-quarter business was supported by strong demand for advanced technologies. Looking ahead to the third quarter, Huang anticipates strong demand from smartphones and AI-related products. C.C. Wei noted in an analyst call that “AI is so hot right now,” and expects chip production to meet demand by 2025 or 2026.
For the third quarter, the company expects revenue to be between $22.4 billion and $23.2 billion, while analysts predict it will be around $23.3 billion.
