© Reuters. A smartphone with a displayed TSMC (Taiwan Semiconductor Manufacturing Firm) brand is positioned on a pc motherboard on this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Picture
By Yimou Lee and Religion Hung
TAIPEI (Reuters) -Taiwanese chipmaker TSMC projected on Thursday greater than 20% progress in 2024 income on booming demand for high-end chips utilized in synthetic intelligence (AI) purposes even because the broader {industry} offers with weak smartphone and electrical automobile gross sales.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker and a serious Apple Inc (NASDAQ:) and Nvidia (NASDAQ:) provider, mentioned at an earnings convention that AI represented a serious alternative
“We’re a key enabler for AI purposes. To this point at present, all the pieces you noticed for AI comes from TSMC,” CEO C.C. Wei mentioned on the convention, after the corporate reported a fourth quarter internet revenue that beat market expectations.
For superior packaging, demand was very robust and TSMC cannot provide sufficient capability to assist prospects, which is able to proceed to subsequent 12 months, he added.
However Wei mentioned that for the {industry} total, he was frightened about over-capacity for mature nodes.
“There may be an excessive amount of capability being constructed proper now for mature nodes. So the priority on over-capacity is legitimate,” he mentioned, although he added that it was not a priority for TSMC on account of robust buyer demand for its speciality applied sciences.
Wanting forward, TSMC mentioned it plans to develop its world manufacturing footprint, with development at its fab plant in Germany anticipated to start within the fourth quarter of this 12 months, whereas TSMC remains to be deciding on what know-how node to construct at a second fab in Arizona.
A primary fab in Japan will open subsequent month with quantity manufacturing within the fourth quarter, whereas the corporate was additionally exploring constructing a second manufacturing unit within the nation.
It forecast capital spending at $28-$32 billion for this 12 months, consistent with 2023, and mentioned it would additionally develop manufacturing at dwelling in Taiwan.
TSMC mentioned it’s evaluating constructing a 3rd fab within the southern Taiwanese metropolis of Kaohsiung, and if it goes forward all three fabs there might be for superior 2 nanometre chips, on account of robust demand pushed by excessive efficiency computing and smartphones.
TSMC posted a 19% drop in internet revenue for the October-December quarter to T$238.7 billion ($7.6 billion) from a very robust year-earlier quarter.
The revenue, although, beat a T$226.4 billion LSEG SmartEstimate, which is weighted towards forecasts from analysts who’re extra constantly correct.
“Our fourth quarter enterprise was supported by the continued robust ramp of our industry-leading 3-nanometer know-how,” mentioned Wendell Huang, TSMC’s chief monetary officer.
He mentioned the present quarter can be impacted by seasonality of the smartphone enterprise, which might be partially offset by energy in its high-performance computing section that features AI chips.
Whereas the corporate mentioned 2023 was difficult, it forecast strong progress for this 12 months, including that it expects inventories to return to a wholesome degree.
Income for 2024 ought to enhance within the low to mid-20% vary in U.S. greenback phrases, it mentioned.
TSMC’s Taipei-listed shares surged 32% final 12 months. The inventory rose 1.2% on Thursday forward of the outcomes versus a 0.4% acquire for the benchmark index, giving the corporate a market worth of $478.3 billion.
($1 = 31.5550 Taiwan {dollars})