TSMC sales surge 36% in fresh sign of AI spending momentum

[TAIPEI] Taiwan Semiconductor Manufacturing reported quarterly sales rose 36 per cent, meeting high expectations and signalling global demand for AI hardware remains intact. 

Revenue for the three months ended June totalled NT$1.27 trillion (US$39.6 billion) according to a Bloomberg calculation, matching the average of analyst estimates. The figures were bolstered by very strong performance in June, when TSMC’s sales rose by 68 per cent compared with the same month a year earlier.

The main chipmaker for Nvidia and Apple is regarded as a gauge of the global AI infrastructure buildout, given its central role in producing the vast majority of the world’s most advanced chips for data centres and smartphones.

Chief executive officer CC Wei warned in June that his company won’t be able to fulfill demand led by American customers for years, even as more manufacturing capacity comes online in the US over the next few years. 

That sentiment has been echoed by major chipmakers. SK Hynix now sees the ongoing memory-chip shortages persisting beyond 2030, as a spending spree by data centre operators has stoked the appetite for both conventional memory and the high-bandwidth or HBM chips that work with AI systems.

Concerns from investors persist as the biggest data centre operators, such as Alphabet, and other AI players spend hundreds of billions of dollars each year on equipment. A significant proportion of their AI spending is now backed by ballooning borrowing, and there’s still no guaranteed path to lucrative returns from the outsized investment.

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Hsinchu-based TSMC has said that it will set aside close to a record US$56 billion for capital expenditures this year. The Taiwanese chipmaker is set to release full earnings and provide an update on its full-year outlook and spending on Thursday. BLOOMBERG