Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest producer of advanced processors, has reported a significant rise in its Q1 2024 earnings, driven by strong demand for AI chips. The company’s net revenue rose 16.5% from a year ago to NT$592.64 billion ($18.87 billion), while net income increased 8.9% from a year ago to NT$225.49 billion. These figures surpassed the LSEG consensus estimates.
TSMC’s clients include industry giants such as Nvidia and Apple. The company’s growth is being fueled by the proliferation of large language models such as ChatGPT and Chinese clones, leading to an insatiable AI-related demand for energy-efficient computing power. TSMC’s CEO, C.C. Wei, stated that the firm estimates revenue contribution from server AI processors to more than double this year.
For the second quarter of 2024, TSMC expects its business to be supported by strong demand for industry-leading 3-nanometer and 5-nanometer technologies, partially offset by a continued smartphone seasonality. The company also plans to commence mass production of 2-nanometer chips in 2025, which are expected to be more powerful and efficient.
TSMC’s shares have surged 56% in the past year due to the strong demand for AI chips. The company expects its second-quarter revenue to be between $19.6 billion and $20.4 billion. Despite facing challenges such as a brief halt in operations due to an earthquake in Taiwan and a slump in the smartphone market, TSMC continues to ride high on the surging demand for AI chips.
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