How TSMC Dominates AI Chip-Making as Q2 Revenue Rises 36%
Taiwan is at the forefront of the global AI boom with the island housing the world’s largest contract chipmaker, TSMC, which has seen its second-quarter revenue surge 36% to a record high.
The organisation is a major supplier to leading technology companies like NVIDIA and Apple. It has been experiencing massive growth since the start of this year, especially from April to June.
Calculations from Reuters show revenue came in at T$1.27tn (US$39.62bn). This figure sits slightly above a T$1.264tn LSEG SmartEstimate drawn from 20 analysts.
The milestone follows stellar quarterly performances for the technology giant. Growth continues to climb as the manufacturer capitalises on intense computational workloads.
Meeting market expectations
On its last earnings call in April, TSMC predicted second-quarter revenue of between US$39bn and US$40.2bn. The actual results comfortably met these expectations.
TSMC reported that revenue rose 67.9% year-on-year to T$442.68bn (US$13.79bn) for June alone. This monthly total was up 6.2% compared with the previous month.
However, Asia’s most valuable publicly listed company, with a market capitalisation of US$1.955tn, did not provide any details or forward guidance in its brief revenue statement.
The manufacturer is scheduled to report second-quarter earnings on 16 July 2024. During this presentation, it will update its outlook and plans for the current quarter and the rest of the year.
The company is expected to report a 58.8% on-year rise in second-quarter net profit, according to an LSEG SmartEstimate, a forecast that has kept investor interest high.
TSMC’s Taipei-listed shares closed up 1% on Monday ahead of the release of the sales data, while the broader market closed flat. The stock has risen 57% so far this year, in line with the broader market.
- TSMC holds a market capitalisation of US$1.955tn and is the world's largest contract chipmaker
- The company's second-quarter revenue surged 36% year-on-year to hit a record T$1.27tn (US$39.62bn)
Expanding semiconductor manufacturing in southern Taiwan
In April, following a stellar revenue increase of 35.1% in the first quarter, TSMC said it would accelerate its multi-billion-dollar expansion in its Arizona semiconductor manufacturing site.
This US expansion includes six wafer fabs, positioning TSMC to better serve AI companies requiring cutting-edge manufacturing.
The chipmaker is now doubling down on the southside of the island. It is adding two more advanced chip packaging plants at the Chiayi Science Park to meet rising global demands.
The development was later revealed by Wu Cheng-wen, National Science and Technology Council Minister, at a ground-breaking ceremony. This latest expansion pushes the total number of facilities at the site to four.
Located in the south of Taiwan, the Chiayi facility has become one of the main centres for TSMC to package its advanced chips. The first plant in the park has already started manufacturing on a large scale.
The second facility is due to do the same very soon. The recent ground-breaking ceremony was held to initiate the second stage of construction, which will result in the establishment of two additional plants.
According to Wu, when finished, the entire industrial complex is expected to produce more than NT$300bn (US$9.35bn) annually. All four facilities taken together are to provide more than 9,000 new jobs, Wu says.
TSMC has been increasing the scale of its capabilities for advanced packaging in several locations. This includes the deployment of its chip-on-wafer-on-substrate (CoWoS) process technology.
This specific technology has become essential in developing the high-performance chips required by companies that manufacture AI hardware.
