More than half of TSMC’s sales are now high-end chips like AI

TAIWAN Semiconductor Manufacturing Company (TSMC) now makes more than half of its revenue from high-performance computing, the segment of its business powered to new heights by runaway artificial intelligence (AI) demand.

The company said on Thursday (Jul 18) that its HPC group accounted for 52 per cent of wafer revenue in the June quarter, the first time it made up the majority of sales. Long reliant on Apple’s iPhone and the wider smartphone industry for the bulk of its business, TSMC has quickly shifted to become the go-to provider of AI accelerators.

Taiwan’s biggest company makes Nvidia and Advanced Micro Devices’ in-demand AI-training chips as well as Qualcomm’s AI-infused laptop processors for new Windows Copilot+ PCs.

TSMC’s transformation provides a direct expression of the shift from the smartphone era into the AI age. Smartphones are now only a third of the company’s business, having been the bulk of it for more than a decade, and the growth trajectory looks set to make AI’s lead even larger in the coming years.

The world’s biggest contract chipmaker reported better-than-expected profit and operating margins, and lifted its outlook for annual sales growth in earnings released on Thursday. This was largely due to the AI boom, with HPC sales growing 28 per cent sequentially and chief executive officer C C Wei said that every TSMC customer is now putting AI into their devices.

“The demand is so high, I have to work very hard to meet my customers’ demand,” he said. “We continue to increase. I hope some time in 2025 or 2026, I can reach a balance.” BLOOMBERG