Sunday, July 21, 2024

AI demand pushes TSMC’s 2024 revenue up 28% so far • The Register

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Semiconductor giant TSMC appears more confident that its fortunes are improving after posting strong second-quarter revenue growth based on demand for advanced chips such as GPUs for AI acceleration.

The Taiwan-based silicon giant revealed in its latest monthly earnings report that net revenue for June was NT$207.87 billion (about $6.4 billion), an increase of 32.9 percent compared to the previous year.

The figures for May and April were NT$229.62 billion (US$7.04 billion) and NT$236.02 billion (US$7.24 billion), both higher than the same period last year.

A full second-quarter earnings report from the world’s largest semiconductor contract manufacturer is expected later this month.

Revenue from January to June 2024 (i.e., year-to-date) amounted to NT$1,266.15 billion (about $38.9 billion), up 28 percent compared with the same period in 2023, the company said.

So far, TSMC is beating analysts’ forecasts, according to MarketWatch, as well as beating its own guidance by generating $20.7 billion in revenue for the second quarter, versus the $19.6 billion to $20.4 billion it predicted.

The growth is attributed to demand for AI chips such as high-end GPUs from California-based Nvidia, for which TSMC is the sole silicon supplier.

In May, TSMC anticipated that revenue from data center AI products (primarily GPUs) would more than double, and said demand was so high that it did not expect to be able to produce enough chips, despite increasing capacity of its chip-on-chip Wafer-on-Substrates (CoWoS) multi-chip packaging process used for Nvidia GPUs.

The Taiwanese chip champion was reported to have briefly surpassed the $1 trillion valuation mark this week, though according to financial site Barron’s, the company is actually worth around $825 billion based on its share price on the Taiwan Stock Exchange, and that $1 trillion valuation comes from its American Depositary Receipts which are traded in the US.

JP Morgan analysts indicated that TSMC is likely to be more confident about its overall revenue growth in 2024 when it comes to its second-quarter earnings report due to this and an increase in demand from Apple thanks to higher iPhone sales.

Meanwhile, some reports indicate that TSMC will begin trial production of chips using its 2nm process next week. The company already had detailed plans to begin volume production of 2nm chips in 2025, and Apple is slated to be one of the first customers in line.

TSMC also revealed details earlier this year of a process technology called A16 that could be used to deliver the first 1.6nm chips to customers by 2026. Discussed at the company’s North American Technology Symposium in Santa Clara, the A stands for angstroms, although TSMC does not officially refer to it as 1.6nm technology. ®

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