TSMC, the world’s largest chipmaker and a significant supplier to Apple and Nvidia, anticipates a potential 30% increase in second-quarter sales, driven by soaring demand for semiconductors used in artificial intelligence (AI) applications.
During the first-quarter earnings call, CEO C.C. Wei highlighted TSMC’s collaboration with AI innovators to meet the skyrocketing demand for energy-efficient computing power.
With first-quarter revenue up 13% year-on-year to $18.87 billion, exceeding previous forecasts, TSMC remains focused on expanding its global manufacturing presence. It aims to commence production in Arizona by the first half of 2025 and recently announced plans to increase its investment in chip production in the state by $25 billion, with a third fabrication plant expected by 2030.
This expansion in Arizona follows the U.S. Commerce Department’s pledge to provide TSMC with a $6.6 billion subsidy for the plant and up to $5 billion in low-cost government loans.
Looking ahead, TSMC foresees robust business in the second quarter, fueled by strong demand for its cutting-edge 3-nanometer (nm) and 5nm technologies, although smartphone demand might lag.
The company maintains its capital spending guidance for the year at $28 billion to $32 billion, with a significant portion allocated to advanced technologies. For 2024, TSMC projects revenue growth in the low- to mid-20% range in U.S. dollar terms.
The Taiwan Semiconductor Manufacturing Company also intends to impose higher fees on customers for producing their chips outside of Taiwan. This decision comes amidst challenges like global capacity expansion, rising power costs, and the growing complexity of advanced technologies, all of which are impacting the company’s profitability.
During the first-quarter earnings call with investors, CC Wei, the CEO of the world’s largest chip manufacturer, stated, “If a customer insists on manufacturing in a specific geographical location, they will be required to cover the additional expenses.”
