TSMC sales ride AI demand boost to beat estimates

TAIWAN Semiconductor Manufacturing Co (TSMC) has reported better-than-expected sales on a boom in artificial intelligence (AI) applications demanding more of the industry-leading company’s chipmaking capacity.

Second-quarter revenue totalled NT$480.8 billion (S$20.7 billion) according to Bloomberg’s calculations. That marked a 10 per cent decline on the prior year, though the drop was not as bad as feared, beating an average analyst estimate of NT$476.2 billion. Sales in June came in at NT$156.4 billion.

TSMC is the primary contract manufacturer of Nvidia’s AI accelerator chips, widely seen as the best hardware for training large data models such as the one underpinning OpenAI’s ChatGPT.

The Taiwanese firm’s shares were unchanged on Monday before it reported the monthly sales figure. Goldman Sachs analysts earlier raised their target price for the company to NT$700. The stock has risen more than 25 per cent since the beginning of the year, despite the company’s caution that revenue for 2023 might fall low- to mid-single digits in US dollar terms.

“We view TSMC as the key AI enabler among our Taiwan semi coverage, thanks to its leadership stance in leading edge nodes and advanced packaging technology,” Goldman Sachs analysts Bruce Lu and Evelyn Yu said ahead of the results. The company has 37 “buy” recommendations, one “hold” and no “sell”, data compiled by Bloomberg indicated. BLOOMBERG