This is good news amid concerns that AI spending is starting to decline.
Results much better than expected
TSMC, which is a major supplier of chips to giants such as Nvidia or Applereported third-quarter sales of NT$759.7 billion ($23.6 billion). Meanwhile, the average forecast was 748 billion New Taiwan dollars. The full financial results of the largest Taiwanese company will be announced next Thursday.
TSMC’s key role
TSMC’s global importance is crucial. This company is located in the very center of the global ecosystem of new technologies, because its factories produce the latest, advanced semiconductors used to train artificial intelligence. TSMC’s sales have more than doubled since 2020. A major contributor to the increase in demand was, among others, pandemic and later the release of ChataGPT, which led to an increase in demand for Nvidia devices mounted in the so-called server farms for AI.
Investors were worried about demand
Nevertheless, in recent months there have been many doubts whether the increase in demand for advanced semiconductors in the AI industry will prove sustainable.
Investors were afraid that companies such as Meta Whether Google Alphabet they cannot sustain the current pace of infrastructure spending without monetizing the use of AI. This kind of skepticism on the part of the markets has led to a decline in the value of shares of AI-related companies, including Nvidia shares earlier this year.
Still, there is value in TSMC stock has more than doubled since OpenAI released ChatGPTand the market capitalization of the Taiwanese giant briefly exceeded one trillion dollars in July this year.
This month, when we learned better than expected TSMC quarterly resultsthe company also improved its revenue growth forecasts for the entire year 2024.
Revision of forecasts shows that spending on AI, whose development requires advanced semiconductors, will remain high – despite growing trade tensions between the United States and China. In both countries, startups and technology companies such as Microsoft and Baidu are investing heavily in the development of AI infrastructure necessary to create new applications.