Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, reported better-than-expected financial results on Thursday, fueled by a surge in demand for AI-related chips. The company disclosed a net income of 225.49 billion New Taiwan dollars (€6.52 billion), surpassing market forecasts and marking its first quarterly profit increase in a year. This figure exceeded the anticipated net income of NT$213.59 billion (€6.18 billion).
Robust Revenue Performance
In addition to its impressive net income, TSMC’s net revenue also exceeded expectations, reaching NT$592.64 billion ($18.87 billion) compared to the forecasted NT$582.94 billion ($16.86 billion). The strong financial performance was attributed in part to the heightened demand for chips utilized in AI applications.
Continued Growth Prospects
During an earnings call, CEO C.C. Wei expressed optimism regarding the sustained interest in AI-related chips throughout the upcoming year. He projected a significant revenue increase of over 50% from server AI processors in 2024, indicating a promising trajectory for TSMC in this segment.
Challenges Amid Industry Trends
While TSMC celebrates its financial success, the broader semiconductor industry faces challenges. The Semiconductor Industry Association reported a decrease in global semiconductor sales in 2023, largely attributed to excessive stockpiling during the pandemic. Over-ordering by electronic manufacturers dampened demand for components as the economy stabilized.
Navigating External Factors
TSMC encountered additional hurdles, including a brief operational halt following an earthquake in Taiwan earlier in the month. Despite the disruption, the company asserts that the impact on its operations was minimal. Furthermore, a decline in the smartphone market posed threats to the semiconductor industry, although demand has shown signs of recovery following a prolonged slump.
Future Outlook
While TSMC and other chipmakers like ASML navigate these challenges, they remain hopeful about the prospects of AI-related demand driving future profits. Despite ASML’s recent mildly disappointing results, both companies anticipate that the growing demand for AI-related chips will contribute positively to their performance in the coming year.
SOURCE: Ref Image from Business Live
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