TSMC's July revenue surged 44.7% year-on-year, highlighting the continued strong demand for AI chips
TSMC's July revenue increased by 44.7% year-on-year, indicating strong demand for AI chips. Analysts expect third-quarter revenue to increase by 37% year-on-year, exceeding expectations. TSMC is a core chip manufacturer for companies such as Apple, Nvidia, and AMD, providing key hardware infrastructure for AI chips. Meanwhile, the smartphone market is recovering, with Apple planning to launch 90 million iPhone 16 devices to boost TSMC's performance. TSMC has long been a global leader in chip manufacturing technology
According to the information obtained from the Wisdom Finance app, the data released by Taiwan Semiconductor (TSM.US) shows that the company's revenue in July reached NT$256.953 billion (approximately US$7.9 billion), a year-on-year increase of 44.7% and a month-on-month increase of 23.6%. Analysts predict that TSMC's revenue in the third quarter will increase by 37% year-on-year to NT$747.4 billion. The July revenue data indicates that the company's third-quarter revenue may exceed analysts' expectations.
As one of the key indicators of demand for artificial intelligence chips, the strong growth in TSMC's July revenue is a preliminary sign that demand for artificial intelligence chips remains strong. Previously, doubts about the potential of artificial intelligence technology have intensified, leading to a sell-off in tech stocks. Investors question whether the billions of dollars invested by large tech companies in infrastructure to support the artificial intelligence boom will bring substantial returns.
TSMC remains the core chip manufacturer for fabless chip design companies such as Apple, NVIDIA, AMD, and Broadcom, especially for data center server-side AI chips manufactured for NVIDIA and AMD. These chips are considered the crucial hardware infrastructure driving large artificial intelligence training/inference systems behind tools like ChatGPT.
The almost insatiable demand for NVIDIA's AI chips has supported TSMC's performance. Meanwhile, the broader smartphone market is on the path to recovery. Apple is planning to launch at least 90 million iPhone 16 devices in the second half of 2024, hoping to stimulate demand for the new product line with AI services, aiming for a significant rebound after experiencing weak iPhone demand in 2023. This will also boost TSMC's performance as the chip manufacturer for Apple.
With decades of semiconductor manufacturing technology accumulation in the chip manufacturing field, TSMC has been at the forefront of chip manufacturing technology improvement and innovation globally (pioneering the FinFET era, leading the 2nm GAA era). With advanced processes and packaging technologies, as well as high yields, TSMC has dominated the majority of global chip manufacturing orders for a long time, especially for chip manufacturing orders of 5nm and below advanced processes. The market currently believes that the demand for advanced process chips driven by the AI boom will enhance TSMC's bargaining power.
It is worth mentioning that recent reports indicate that TSMC will raise its prices for 5nm and 3nm process chip manufacturing in 2025. The report cites sources familiar with TSMC, stating that the leading global chip manufacturer has informed customers that the expected price increase will be between 3% and 8%