Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue rose 9.4 percent in the first two months of this year, riding a wave of global artificial intelligence (AI) development that is helping offset potential fallout from slowing iPhone sales.
Asia’s largest company reported sales of NT$397.4 billion (US$12.6 billion) in the January-February period. That is despite signs that Apple Inc, which accounted for 25 percent of its business last year, is struggling to sustain momentum for the iPhone, particularly in China.
TSMC, the main chipmaker to Nvidia Corp, is riding a wave of activity in AI that accelerated after OpenAI rolled out ChatGPT.
Photo: Mike Kai Chen, Bloomberg
The world’s most advanced chipmaker is considered one of the major beneficiaries of a rise in development of large language models that require high-end chips. This week, JPMorgan became the latest brokerage to raise its price target for the Taiwanese company, citing not just AI, but potentially business from Intel Corp as well in coming years.
TSMC is “the enabler for almost all AI processing at the data center and the edge,” analysts including Gokul Hariharan wrote.
In January, executives said they expect a return to solid growth this quarter and gave themselves room to raise capital spending this year, suggesting TSMC anticipates a recovery in smartphone and computing demand. That outlook follows a years-long slump that many industry players expect to end this year.
Its second-largest customer makes up 11 percent of sales. Analyst Mark Li at Bernstein believes it is Advanced Micro Devices Inc, which is aiming to gain share in the AI chip market.
United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, saw revenue edge down 0.15 percent in the first two months of the year, from NT$36.52 billion made in the same period last year.
The Hsinchu-based chipmaker in January said wafer shipments this quarter would rise 2 or 3 percent sequentially, but the blended average selling price would drop about 5 percent due to a one-off pricing adjustment at the beginning of the year.
UMC said it was cautiously optimistic about this year as an inventory glut in the auto and industrial segments remained, although demand for chips used in smartphones and PCs has stabilized.
UMC counts Intel among its customers for 28-nanometer chips. In January, it announced that it has formed strategic partnership with Intel to produce 12-nanometer chips at one of Intel’s factory in the US to secure customer orders for advanced chips.
Additional reporting by Lisa Wang
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list
RSS