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Taiwan Semiconductor Manufacturing Company makes most of the world’s advanced chips, and demand amid the generative artificial intelligence boom is expected to boost its profit 30% year-over-year.
The Taiwanese chipmaker is expected to report net income of NT$236.4 billion, or $7.3 billion, for the second quarter of 2024, according to FactSet analysts’ estimates — a 30% increase from a year ago, when it reported profit of NT$181.8 billion. TSMC, which has an exclusive partnership with AI chip designer Nvidia and fabricates chips for Apple, has seen its shares rise 82.9% so far this year. The chipmaker reports second-quarter earnings on Thursday.
In June, TSMC said its net revenue in May rose 30% year-over-year to $7.1 billion. While that was a decrease of 2.7% from April, the company’s revenue for the period of January through May saw a year-over-year increase of 27%. Earlier that month, TSMC chairman and chief executive C.C. Wei reaffirmed previous projections that the chip market, excluding the memory sector, would experience 10% growth this year driven by the AI boom.
TSMC predicted in April its second-quarter sales could rise by up to 30% — higher than projected — thanks to customers including Nvidia and Apple. It set second-quarter revenue expectations to between $19.6 billion and $20.4 billion, higher than the earlier estimated $19.1 billion. TSMC also said it was keeping plans to spend up to $32 billion this year, a majority of which will go toward advanced technologies.
“Moving into second quarter 2024, we expect our business to be supported by strong demand for our industry-leading 3nm and 5nm technologies, partially offset by continued smartphone seasonality,” Wendell Huang, senior vice president and chief financial officer of TSMC, said in a statement in April.
Earlier this year, TSMC received $6.6 billion in grants through the federal CHIPS and Science Act to support its first major U.S. chipmaking hub in Phoenix. TSMC already has two chipmaking facilities in Arizona expected to begin production in 2025 and 2028 and will use some of the new funding to build a third facility, increasing the company’s investment from $40 million to $65 million.