TSMC posts record revenue as AI chip demand stays strong

Taiwan Semiconductor Manufacturing Company. It posted another quarter of record revenue on Friday, driven by demand for artificial intelligence chips.

The world’s largest chipmaker reported revenue of 1.13 trillion new Taiwan dollars ($35.6 billion) in the January-March period, according to compiled estimates from LSEG; This figure exceeded analysts’ estimates of 1.12 trillion new Taiwan dollars. This represents a 35 percent annual increase.

In March alone, TSMC reported that its revenue reached 415.2 billion new Taiwan dollars, up 45.2% year on year.

The chip giant is benefiting from sustained demand for advanced semiconductors from its key customers. Apple And NvidiaEven as concerns remain about supply chain disruptions resulting from the Middle East conflict and the potential impact this will have on demand.

“We think TSMC will easily exceed its 30% annual growth target,” Sravan Kundojjala, an analyst at SemiAnalytics, told CNBC via email.

“While the smartphone and PC end markets have been hit by memory shortages, TSMC’s AI segment has pulled the brunt,” Kundojjala added.

TSMC makes chips for everything from consumer electronics to data centers and has been one of the biggest beneficiaries of the hundreds of billions of dollars poured into artificial intelligence infrastructure.

It is one of the very few companies that can produce cutting-edge chips.

TSMC is also reportedly increasing prices of its most advanced chips, which is a “big factor” behind its first-quarter sales increase. Kundojjala added that he estimates TSMC will report a 64% gross margin for the first quarter.

A growing number of players are designing their own chips from hyperscalers Google with ArmIt comes to the market with its own central processing unit (CPU), providing the blueprint for certain semiconductors. AI firm Anthropic is also exploring designing its own chip, Reuters reported, while a long line of startups are also bringing new products to market aimed at the AI ​​inference space.

Most of the production will have to go through competitors like TSMC or Samsung. Intel.

TSMC publishes monthly revenue figures but offers little commentary or profitability figures. The company will announce its full first-quarter earnings on April 16.

Investors will also look at earnings ASML Next week, a company seen as a pioneer in the semiconductor field will be introduced. The Dutch giant produces machines that are critical for companies such as TSMC to produce the world’s most advanced chips.