TSMC sales fall less than feared as AI demand offsets slump
TAIWAN Semiconductor Manufacturing Co’s (TSMC) third-quarter revenue slid less than projected as demand from artificial intelligence (AI) players helped offset sagging smartphone and laptop chip sales.
TSMC, the main chipmaker to Apple and Nvidia reported July-September revenue of NT$546.7 billion (S$23.3 billion) Bloomberg’s calculations indicated. That marked an 11 per cent decline on the prior year but beat the average estimate of NT$531.5 billion.
Data centres driving AI are boosting demand for some of TSMC’s biggest clients, including Nvidia, as well as that of memory used with those systems. The preliminary sales numbers come as investors look for signs that climbing orders for AI chips are overcoming supply constraints and translating into sales, and may alleviate concerns about a prolonged sector-wide slump.
TSMC is the primary contract manufacturer of Nvidia’s AI accelerator chips, now widely sought to train large data models such as the one underpinning OpenAI’s ChatGPT.
Strong demand for TSMC’s advanced packaging service may also bolster sales, even as the semiconductor sector continues to work through excess inventory, said Bloomberg Intelligence analyst Charles Shum. A favourable exchange rate could further help its profit margin, he added.
Investors will be focusing on the Taiwanese firm’s outlook when it reports July-September earnings on Oct 19. TSMC is seen as a bellwether for the technology sector, amid growing concern for slowing sales growth at tech giants such as Apple.
TSMC’s stock closed about 0.8 per cent higher in Taipei on Friday. Its shares have gained more than 18 per cent since the beginning of the year. BLOOMBERG
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