TSMC reports 39% revenue growth, calms fears of slowing AI demand

Taiwan Semiconductor Manufacturing Co. (TSMC) posted a 39% rise in quarterly revenue, beating expectations and easing worries that AI hardware spending might slow down. The chipmaker for Nvidia and Apple reported September-quarter sales of NT$759.7 billion ($23.6 billion), surpassing analysts’ forecast of NT$748 billion. Full results are due next Thursday.

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TSMC, crucial to the AI boom, makes the advanced chips driving AI development. Its sales have more than doubled since 2020, fueled by demand for Nvidia hardware after ChatGPT’s launch. Despite concerns about AI growth sustainability, TSMC raised its 2024 revenue outlook in July after its market cap briefly hit $1 trillion.

While some investors are cautious about future AI infrastructure spending, demand remains strong, with companies like Microsoft and Baidu racing to build AI capabilities. Delays in Nvidia’s new Blackwell chips are not seen as a long-term issue for TSMC, whose market leadership keeps it ahead of competitors like Intel and Samsung. Hon Hai, Nvidia’s server partner, also confirmed solid demand for AI hardware, with plans to expand production capacity.