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On Fri, 8 Nov, 4:02 PM UTC
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TSMC October Sales Growth Slows on Moderating AI Chip Demand
Taiwan Semiconductor Manufacturing Co.'s sales rose 29.2% in October, the slowest pace of growth since February in a cautionary note about AI chip demand's staying power. The manufacturer of Apple Inc. and Nvidia Corp. chips reported monthly sales of NT$314.2 billion ($9.8 billion). That follows sales growth exceeding 30% in every month between March and September. Analysts expect the chipmaker to deliver a 36.1% increase in sales for the three-month period through December.
[2]
TSMC Posts Record Monthly Revenue, Powered by AI Boom
Taiwan Semiconductor Manufacturing Co.'s October sales hit a record high as the boom in artificial intelligence continued to power demand for its advanced chips. The world's largest contract chip maker's October revenue rose 29% to 314.24 billion New Taiwan dollars, the equivalent of $9.79 billion, the first time it has posted monthly sales worth over 300 billion New Taiwan dollars. That took its January-October revenue to 2.340 trillion New Taiwan dollars, up 31.5% compared with the same period a year earlier. The chip maker last month reassured investors that the AI boom is real, after it reported a record quarterly profit in the third quarter. Chief Executive C.C. Wei said at the October earnings call that revenue from AI-related servers and processors was expected to triple this year and would account for about 15% of TSMC's total revenue. The Taiwanese company guided for fourth-quarter revenue of US$26.1 billion to US$26.9 billion, with an expected gross profit margin of between 57% and 59%.
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Taiwan Semiconductor Manufacturing Co. (TSMC) posts record monthly revenue in October, driven by AI chip demand. However, the growth rate shows signs of moderation, raising questions about the sustainability of the AI chip boom.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, has reported a record-breaking monthly revenue for October 2024, highlighting the ongoing impact of the artificial intelligence (AI) boom on the semiconductor industry. However, the growth rate has shown signs of moderation, raising questions about the sustainability of AI chip demand.
TSMC's October sales reached an unprecedented NT$314.2 billion ($9.8 billion), marking the first time the company has surpassed the NT$300 billion threshold in monthly revenue 12. This achievement underscores the company's dominant position in the global semiconductor market and its crucial role in supplying chips for AI applications.
Despite the record-breaking figures, TSMC's year-over-year growth rate for October stood at 29.2%, the slowest pace since February 1. This represents a notable deceleration compared to the consistent 30%+ growth rates observed between March and September 2024. The slowdown has prompted industry observers to reassess the long-term trajectory of AI chip demand.
TSMC's Chief Executive, C.C. Wei, remains optimistic about the AI sector's impact on the company's performance. During an October earnings call, Wei projected that revenue from AI-related servers and processors would triple in 2024, accounting for approximately 15% of TSMC's total revenue 2. This forecast suggests that while growth may be moderating, AI remains a significant driver of TSMC's business.
The company's year-to-date revenue for January through October 2024 reached NT$2.340 trillion, representing a 31.5% increase compared to the same period in the previous year 2. This robust performance has bolstered investor confidence in TSMC's ability to capitalize on the AI trend.
Looking ahead, TSMC has provided guidance for the fourth quarter of 2024, projecting revenue between $26.1 billion and $26.9 billion, with an expected gross profit margin ranging from 57% to 59% 2. These projections suggest that while growth may be slowing, the company still anticipates strong demand for its advanced chip manufacturing capabilities.
As a key supplier to tech giants like Apple Inc. and Nvidia Corp., TSMC's performance serves as a barometer for the broader technology sector 1. The moderation in growth rate could signal a potential cooling in the AI chip market, prompting tech companies and investors to reassess their strategies and expectations for the coming year.
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Taiwan Semiconductor Manufacturing Company (TSMC) posted a 34% year-over-year revenue increase in November, reaching $8.5 billion, fueled by strong demand for AI chips and advanced manufacturing processes.
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