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
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