Taiwan Semiconductor Manufacturing Co. (TSMC) has increased its revenue growth forecast for 2024 after reporting quarterly results that exceeded expectations, easing concerns about global chip demand and the resilience of the AI hardware market. The leading chipmaker for companies like Nvidia and Apple now anticipates a sales increase of roughly 30% in US dollar terms for 2024, up from previous mid-20% predictions, following a strong performance in the September quarter. TSMC also expects capital expenditure to rise in 2025 from approximately $30 billion this year. TSMC's positive outlook aims to counter doubts raised after ASML Holding NV reported significantly fewer orders than anticipated, prompting concerns about AI and semiconductor demand. TSMC’s CEO, C. C.

Wei, emphasized the genuine nature of the demand, stating it is just beginning and that overall chip demand is stabilizing and improving. In pre-market trading, TSMC’s American depositary receipts rose over 6%, and Nvidia's shares increased by about 2. 5%. TSMC's stock has surged more than 70% this year, reflecting a strong demand for Nvidia’s AI chips. Earlier this year, TSMC had already revised its 2024 revenue outlook, driven by anticipated spending on AI infrastructure from major firms like Microsoft and Amazon. This consistent AI adoption is expected to boost sales of various consumer electronics over time. Despite investor concerns about the broader chip market, experts note that TSMC is better positioned than competitors like Intel and Samsung. TSMC’s gross margin guidance of over 57% for the fourth quarter, compared to a consensus of 54. 7%, along with the rapid revenue growth in its N3-node technology, indicates continued strong demand for AI chips. For the September quarter, TSMC reported a 54% rise in net profit to NT$325. 3 billion ($10. 1 billion) and forecasts revenue of $26. 1 billion to $26. 9 billion for the final quarter, surpassing estimates. As part of its long-term strategy, TSMC plans to expand internationally, with new facilities in Europe focused on AI chip production, in addition to ongoing constructions in Japan, Arizona, and Germany. However, increasing caution among investors is evident due to potential overcapacity in data centers and geopolitical tensions impacting sales of advanced AI chips.