TSMC logo. Reuters-Yonhap News
Taiwan’s TSMC, the world’s largest foundry (contract chipmaker), posted second-quarter results that exceeded market expectations, driven by demand for artificial intelligence (AI) chips. TSMC decided to increase its local investment by an additional $100 billion (about 147.8 trillion won) to expand semiconductor production capacity in the United States.
TSMC reported second-quarter revenue of 1.27 trillion Taiwan dollars (about 59 trillion won) and net profit of 706.56 billion Taiwan dollars (about 33 trillion won), the company said on the 16th.
The figures surpassed the market forecasts of financial information provider LSEG, which projected revenue of 1.264 trillion Taiwan dollars and net profit of 632.64 billion Taiwan dollars. TSMC’s net profit rose 77% from a year earlier, marking nine consecutive quarters of double-digit net profit growth.
Earlier, on the 13th of this month, TSMC announced that its second-quarter consolidated revenue reached 1.2704 trillion Taiwan dollars (about 58.6 trillion won), up 36% from a year earlier, exceeding market forecasts and setting a record high.
TSMC supplies AI chips to global big tech companies including Nvidia, Apple, and Broadcom, and is regarded as the biggest beneficiary of expanding AI investment. In particular, advanced processes of 7㎚ (nanometers, one-billionth of a meter) or below accounted for 77% of total wafer revenue, with production of high-value-added advanced chips driving results. The 2-nanometer process accounted for 3%, reflected in revenue for the first time. The 3-nanometer and 5-nanometer processes accounted for 30% and 33%, respectively.
By segment, the high-performance computing (HPC) division, which includes AI chips, had the largest revenue share at 66%. HPC revenue rose 20% from the previous quarter. The smartphone segment had a revenue share of 22%, with revenue down 4% from the previous quarter. The Internet of Things (IoT) accounted for 5%, and automotive chips for 4%.
TSMC Chairman C.C. Wei said during the earnings conference call that day that the company would invest an additional $100 billion in Arizona over several years. This raises TSMC’s U.S. investment to $265 billion, sharply up from the $165 billion the company presented in March last year. Bloomberg reported that “TSMC plans to invest about $56 billion (about 82.9136 trillion won) in capital expenditure this year alone.”
Reuters reported that “the market capitalization of TSMC, Asia’s largest company by market value, has grown to about $1.97 trillion (about 2,921 trillion won),” adding that “this is about twice the level of its global rival Samsung Electronics (about 1,492 trillion won).”