Recent sales data from Taiwan Semiconductor Manufacturing (TSMC) suggests that the chip maker is performing better than expected. This positive trend is attributed to the increased demand in the artificial-intelligence technology sector. Notably, TSMC's impressive figures also have a positive impact on the consumer-electronics industry.
On Friday, the world's largest third-party semiconductor chip manufacturer announced its sales numbers for September. TSMC's revenue for the month saw a 13% decrease compared to the previous year and a 4.4% drop from August.
Despite the overall slowdown in the chip market, TSMC's performance in the September quarter surpassed expectations. The company's monthly reports reveal that its quarterly sales reached approximately 546.7 billion Taiwanese dollars, equivalent to around $17.0 billion. Analysts had forecasted sales of 534.8 billion Taiwanese dollars, according to a FactSet consensus.
TSMC is primarily known for manufacturing the main processors found in Apple iPhones, Qualcomm mobile chipsets, and processors by Advanced Micro Devices (AMD).
In premarket trading on Friday, American depositary receipts of TSMC experienced a 1.0% increase.
The Impact of AI Demand on TSMC's Sales
By Adam Clark
The demand for AI training chips has been on the rise, but how has it affected the overall sales of TSMC? This is the question raised by independent analyst Richard Windsor, who suggests that the insatiable demand for AI processors may not have fully offset the weakness in smartphones and consumer electronics.
TSMC, a leading chip manufacturer, produces chips designed by Nvidia, which have gained popularity for their ability to power AI applications. However, supply bottlenecks have emerged as a significant issue. To tackle this problem, OpenAI, the developer of ChatGPT, is reportedly exploring the development of its own AI processors.
Windsor believes that despite the soaring demand for TSMC's chips, it is unlikely that higher-than-expected sales of AI chips have been the primary driver of their recent sales surprise. This is due to the shortage of available AI processors in the market.
Instead, Windsor suggests that there could be a potential stabilization in inventories of semiconductors used in consumer electronics, which could be good news for companies like Qualcomm. Qualcomm supplies chips to Apple, but its revenue has been affected by a slower-than-expected recovery in Chinese consumer spending and a weak global smartphone market.
Shares of Qualcomm saw a slight increase of 0.6% in premarket trading.