How AI Chip Demand Took TSMC Quarterly Revenue to US$39bn

Taiwan is at the forefront of the AI boom, housing the world’s largest contract chipmaker, TSMC, which has seen its Q2 revenue surge 36% to a record high. 

The organisation, which is a major supplier to companies including NVIDIA and Apple, 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), which sits slightly above a T$1.264tn LSEG SmartEstimate drawn from 20 analysts.

The milestone follows stellar quarterly performances for the technology giant as it continues to capitalise on computational workloads.

Outperforming financial forecasts

On its last earnings call in April, TSMC predicted second-quarter revenue of between US$39bn and US$40.2bn.

TSMC reported that revenue rose 67.9% year-on-year to T$442.68bn (US$13.79bn) for June alone, which was up 6.2% compared with the previous month.

However, Asia’s most valuable publicly listed company – which has a market capitalisation of US$1.955tn – did not provide any details or forward guidance in its brief revenue statement.

At the time of writing, TSMC is scheduled to report second-quarter earnings on 16 July, when it will also update its outlook and plans for the current quarter and the rest of the year.

The manufacturer is expected to report a 58.8% on-year rise in second-quarter net profit, according to an LSEG SmartEstimate.

TSMC’s Taipei-listed shares closed up 1% on Monday ahead of the release of the sales data, while the broader market closed flat. It has risen 57% so far this year, in line with the broader market.

Expanding 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.

The expansion includes six wafer fabs, positioning TSMC to better serve AI companies requiring cutting-edge manufacturing.

The chipmaker is now doubling down on the south side of the island, adding two more advanced chip packaging plants at the Chiayi Science Park, to meet the rising demands.

The development was later revealed by Wu Cheng-wen, National Science and Technology Council Minister, at a ground-breaking ceremony, pushing the site’s total to four facilities.

Located in the south of Taiwan, the facility has become one of TSMC’s main centres for the packaging of the advanced chips. 

The first one in the park has already started manufacturing on a large scale, while the second facility is due to do the same very soon.

The recent ceremony was to initiate the second stage of construction of the facility, 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, he added. 

Recently, TSMC’s been seen to increase the scale of its capabilities for advanced packaging in several locations, including through the use of its chip-on-wafer-on-substrate (CoWoS) process technology.

This technology has become essential in developing the high-performance chips required by companies that manufacture AI hardware. One such company ordering more than the available supply is NVIDIA, one of the leading manufacturers of AI chips.