TSMC Forecasts Multi-Year AI Chip Growth Amid U.S. Expansion
Synopsis
The chipmaker plans to deepen its U.S. manufacturing presence as demand for advanced AI semiconductors continues to accelerate, despite construction workforce shortages.
Key Highlights
- TSMC expects its AI-driven revenue business to grow more than 40% this year.
- The size of planned Arizona investment to increase $265 billion including a new $100 billion commitment.
- TSMC announced second-quarter revenue of US$40.2 billion, stating that demand for AI will remain robust for several years.
TSMC has raised its full-year AI revenue growth forecast to more than 40% and said it still expects strong, multi-year demand for AI chips as the company expands its investment in Arizona to an amount of US$265 billion.
TSMC, the world’s biggest contract chipmaker, registered second quarter revenue of US$40.2 billion supported by strong demand for A.I. chips. As the company keeps riding on the “multi-year AI megatrend,” CEO C.C. Wei said in a statement.
Arizona Expansion Continues
TSMC Chief Financial Officer Wendell Huang said that his firm is very pleased with the way its Arizona project is progressing, which has prompted TSMC to make a second US$ 100 billion investment commitment in the U.S.
The company remains committed to investing, he said, stressing the support from its partner in the US. Taiwan Semiconductor Manufacturing Company’s first Arizona chip plant is already operational and yielding “as good as” its flagship Taiwan production plant.
Equipment installation for the second factory is slated to start in the coming weeks, as a third factory has begun construction. At the same time, it has begun early work on a fourth factory and its first advanced-packaging facility at the site. All told, TSMC is currently set to construct a dozen semiconductor manufacturing and advanced packaging facilities, plus an R&D facility, in Arizona.
Construction Challenges Remain
Huang said Arizona continues to have some challenges, specifically, a scarcity of construction workers and infrastructure. He said TSMC is in very close cooperation with the government of the US to resolve these matters.
Meanwhile, the company is also still growing in Taiwan where it announced its plans to build 13 leading-edge and advanced packaging facilities in the next few years. Because of its close integration between research and manufacturing, Huang said Taiwan continues to be the ideal place for developing the company's most advanced chip technologies.
Geopolitical Risks Continue
TSMC said it might sell new bonds if market conditions are right, though there would be no immediate need to seek funds through selling stocks in the US. US export controls on advanced chips to China are also a continuing problem for the company.
In response to a reported US probe into a chip that ultimately found its way into a Huawei AI chip, Huang said TSMC regularly reviews its export control systems but can't follow products all the way after they are sold to customers who sometimes resell them.
TSMC shares fell by 7.3% Friday despite a record results report, but they’re nearly 50% higher for the year. While Samsung Electronics and Intel (INTC) have their own ambitions in the space, Huang said he is confident about the company’s position.
Source: Reuters
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