Taiwan Semiconductor Manufacturing’s revenue rose 9.4 per cent in 2024’s first two months, riding a wave of global AI development that’s helping offset potential fallout from slowing iPhone sales.

Asia’s largest company reported sales of US$12.6 billion from January to February. That’s despite signs that Apple, which accounted for 25 per cent of its business last year, is struggling to sustain momentum for the iPhone, particularly in China. 

TSMC, the main chipmaker to Nvidia, is riding a wave of activity in artificial intelligence that accelerated after OpenAI rolled out ChatGPT. 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 on the Taiwanese company, citing not just AI but potentially business from Intel 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 in 2024, suggesting TSMC anticipates a recovery in smartphone and computing demand. That outlook follows a years-long slump that many industry players expect to end in 2024.

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Its second-largest customer makes up 11 per cent of sales. Analyst Mark Li at Bernstein estimates it’s Advanced Micro Devices, which is aiming to gain share in the AI chip market. TSMC doesn’t disclose the names of its top customers. BLOOMBERG