Microsoft<\/a>, Meta and Amazon to deliver clearer returns on AI investment has raised doubts about how long the chip spending boom can last. Still, these companies are expected to spend over $600 billion this year on data centers.<\/p>\n“AI (demand) \u200cis so strong … Our customers, and \u2060customers of customers – who are mainly the cloud service providers – continue to provide us with their very strong signal and positive outlook,” TSMC CEO C.C. Wei \u2060said on an analyst call.<\/p>\n
The company raised its annual revenue forecast on Thursday and said it was stepping up capital spending this year to meet AI chip demand.<\/p>\n
ASML, the world’s largest supplier of chip-making tools, also \u200blifted its \u200bannual revenue forecast on Wednesday.<\/p>\n
“ASML’s positive numbers generally paint \u200ba favorable picture for the semiconductor industry, \u200ceven amid AI bubble concerns,” said Giuseppe Sette, co-founder and president of investment analysis platform Reflexivity.<\/p>\n
While overall AI chip appetite remains strong, demand is increasingly moving towards advanced processors required to make large language models operate or apply their training to answer questions, also known as inference.<\/p>\n
CAPACITY CONSTRAINTS LIMIT GROWTH POTENTIAL<\/p>\n
With demand for AI chips and equipment skyrocketing, the industry’s heavy reliance on a handful of suppliers means \u200cchipmakers can only meet orders if they secure sufficient \u200bmanufacturing capacity at those firms.<\/p>\n
As a result, companies have taken \u200bto signing long-term agreements to secure capacity \u200bcommitments for multiple years.<\/p>\n
ASML CEO Christophe Fouquet said demand is set to outstrip \u200csupply for the foreseeable future, creating constraints across \u200bmarkets ranging from AI \u200bto smartphones and personal computers.<\/p>\n
TSMC executives on Thursday also pointed to tight production capacity, with the company working aggressively to expand manufacturing capabilities in order to produce AI chips in mass \u200bquantities.<\/p>\n
“Capacity is very tight, but we \u200care working hard to make sure that we can meet customers’ demand … we are \u200bstepping up our capex investment to increase our capacity,” Wei said.<\/p>\n
(Reporting by Zaheer Kachwala \u200band Deborah Sophia in Bengaluru; Editing by Devika Syamnath)<\/p>\n","protected":false},"excerpt":{"rendered":"By Zaheer Kachwala and Deborah Mary Sophia April 16 (Reuters) – Strong forecasts from ASML and TSMC this…\n","protected":false},"author":2,"featured_media":3227,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[3292,65,3293,1454],"class_list":{"0":"post-3226","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-asml","8":"tag-advanced-micro-devices","9":"tag-asml","10":"tag-spending","11":"tag-tsmc"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/posts\/3226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/comments?post=3226"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/posts\/3226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/media\/3227"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/media?parent=3226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/categories?post=3226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/netherlands\/wp-json\/wp\/v2\/tags?post=3226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}