TSMC Expects up to 30% Revenue Increase in June Quarter Driven by AI Demand for Advanced Chips

Taiwan Semiconductor Manufacturing Co. (TSMC) is anticipating a revenue increase of up to 30% in the June quarter, driven by a surge in artificial intelligence (AI) development that is fueling demand for its advanced chips. This positive outlook comes after the company reported its first profit increase in over a year, which was attributed to strong AI demand that boosted growth at the world’s largest contract chipmaker.

TSMC expects revenue to be between $19.6 billion and $20.4 billion in the June quarter, higher than earlier estimates of around $19.1 billion. The growth is expected to come from rising demand for chips that accelerate AI development, which is helping to offset the impact of a slowdown in the smartphone market.

The company’s market value has increased significantly since October 2022, reflecting investors’ confidence in its positioning to benefit from the global AI development trend. TSMC has set a capital expenditure budget of $28 billion to $32 billion for 2024. In the March quarter, TSMC recorded a 9% rise in net income to NT$225.5 billion ($7 billion), outperforming expectations.

Looking ahead, TSMC expects revenue to grow by at least 20% for the full year as the semiconductor market rebounds. However, there are concerns about the sustainability of current levels of AI chip demand and the broader global macroeconomic environment. Additionally, uncertainty in the Taiwan Strait poses risks to the company’s operations.

Despite these challenges, TSMC remains optimistic about the long-term prospects of AI-focused chips, with AI revenue growing at a rate of 50% annually