Taiwanese chipmaker TSMC projected on Thursday greater than 20% development in 2024 income on booming demand for high-end chips utilized in synthetic intelligence (AI) functions even because the broader {industry} offers with weak smartphone and electrical automobile gross sales.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker and a serious Apple Inc and Nvidia provider, mentioned at an earnings convention that AI represented a serious alternative.
“We’re a key enabler for AI functions. Thus far in the present day, every thing you noticed for AI comes from TSMC,” CEO C.C. Wei mentioned on the convention, after the corporate reported a fourth quarter web revenue that beat market expectations.
For superior packaging, demand was very sturdy and TSMC cannot supply sufficient capability to help prospects, which is able to proceed to subsequent 12 months, he added.
However Wei mentioned that for the {industry} general, he was fearful about over-capacity for mature nodes.
“There may be an excessive amount of capability being constructed proper now for mature nodes. So the priority on over-capacity is legitimate,” he mentioned, although he added that it was not a priority for TSMC resulting from sturdy buyer demand for its speciality applied sciences.
Wanting forward, TSMC mentioned it plans to increase its international manufacturing footprint, with building at its fab plant in Germany anticipated to start within the fourth quarter of this 12 months, whereas TSMC remains to be deciding on what know-how node to construct at a second fab in Arizona.
A primary fab in Japan will open subsequent month with quantity manufacturing within the fourth quarter, whereas the corporate was additionally exploring constructing a second manufacturing unit within the nation.
It forecast capital spending at USD 28-USD 32 billion for this 12 months, in step with 2023, and mentioned it’s going to additionally increase manufacturing at house in Taiwan.
TSMC mentioned it’s evaluating constructing a 3rd fab within the southern Taiwanese metropolis of Kaohsiung, and if it goes forward all three fabs there will likely be for superior 2 nanometre chips, resulting from sturdy demand pushed by excessive efficiency computing and smartphones.
TSMC posted a 19% drop in web revenue for the October-December quarter to TUSD 238.7 billion (USD 7.6 billion) from a very sturdy year-earlier quarter.
The revenue, although, beat a TUSD 226.4 billion LSEG SmartEstimate, which is weighted towards forecasts from analysts who’re extra persistently correct.
“Our fourth quarter enterprise was supported by the continued sturdy ramp of our industry-leading 3-nanometer know-how,” mentioned Wendell Huang, TSMC’s chief monetary officer.
He mentioned the present quarter can be impacted by seasonality of the smartphone enterprise, which might be partially offset by power in its high-performance computing section that features AI chips.
Whereas the corporate mentioned 2023 was difficult, it forecast stable development for this 12 months, including that it expects inventories to return to a wholesome stage.
Income for 2024 ought to enhance within the low to mid-20% vary in U.S. greenback phrases, it mentioned.
TSMC’s Taipei-listed shares surged 32% final 12 months. The inventory rose 1.2% on Thursday forward of the outcomes versus a 0.4% achieve for the benchmark index, giving the corporate a market worth of USD 478.3 billion.
(USD 1 = 31.5550 Taiwan {dollars})
