Artificial Intelligence Drives “TSMC” to Record First Profit Increase in a Year: “Taiwan Semiconductor Manufacturing” (TSMC),
a semiconductor manufacturer has recorded its first profit increase in a year,
thanks to the strong demand for artificial intelligence, which has rejuvenated growth in the world’s largest chip manufacturer on demand.
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Artificial Intelligence Chances
Sales Growth
The chip manufacturer, which is also the main supplier for companies such as Apple and Nvidia,
recorded a 9% increase in its operating net income,
reaching 225.5 billion New Taiwan Dollars (approximately 7 billion US Dollars) in the first three months of this year.
This exceeded the average analyst expectations of 214.9 billion New Taiwan Dollars.
Last week, Taiwan’s largest company reported its fastest sales growth since 2022,
indicating that the demand for chips that accelerate the development of artificial intelligence
began to offset the negative impacts of the declining smartphone market.
This comes after Apple, which accounted for a quarter of TSMC’s revenue in 2023,
experienced a significant drop in iPhone sales in China.
Artificial Intelligence Chances
The market value of “TSMC” has increased by about 340 billion dollars since reaching its lowest level in October 2022,
benefiting greatly from the increasing global momentum in the development of artificial intelligence.
At the beginning of the year, the company set its capital expenditure
budget 2024 at between 28 and 32 billion dollars.
In January, the company expected its revenue to grow by at least 20% this year
thanks to the recovery of the broader semiconductor market despite the unstable conditions of the global macroeconomy.
Conversely, “ASML Holding” reported a 22% decrease in its first-quarter bookings on Wednesday.
“ASML” is the main supplier and the only provider of the world’s most advanced chip manufacturing machines.
Demand for AI Chips
In the long term, investors expect chips focused on artificial intelligence to gradually gain a larger share of revenues.
In January, TSMC announced that its artificial intelligence revenues are growing at an annual rate of 50%.
However, some investors warn that the current
level of demand for AI chips may not be sustainable in the long term.
Others remain concerned due to the escalating tensions around the Taiwan Strait,
a narrow waterway between China and the island it considers part of its territory.
Artificial Intelligence Drives “TSMC” to Record First Profit Increase in a Year