Chipmaker TSMC sees high demand, raises revenue target

The global chip industry, particularly driven by the artificial intelligence boom, is set for sustained growth, according to TSMC, the world's largest contract chip manufacturer. Company CEO C.C. Wei stated that demand is significantly outstripping supply, prompting TSMC to increase its investment plans.

The Taiwanese tech giant is boosting its capital expenditure for the current year to between $60 billion and $64 billion, an increase of $8 billion from previous projections. This investment will fund new facilities and technologies. Furthermore, TSMC is significantly scaling up its commitments for manufacturing plants in the United States, increasing its pledges by $100 billion to a total of $265 billion. This expansion aims to establish 10 manufacturing and two packaging facilities in the U.S. as part of a political agreement with the United States to reduce reliance on Asian chip production.

TSMC has also raised its revenue forecast for the year, now expecting a growth of over 40% in U.S. dollar terms, up from the previous projection of more than 30%. This optimism is supported by a 36% surge in second-quarter revenue, reaching NT$1.27 trillion, fueled by high chip demand linked to AI. The company's profitability also saw a substantial increase, with net profit rising 77% to nearly NT$707 billion ($19 billion), driven by higher margins.

The market has responded favorably to TSMC's performance and outlook. The company's stock price has surged by nearly 120% in the past year and more than quadrupled over the last five years. TSMC's market capitalization now stands at approximately NT$64 trillion, or nearly $2 trillion USD, positioning it as the sixth most valuable company globally and the highest-ranked non-American firm, following tech giants like Nvidia, Apple, Alphabet, Microsoft, and Amazon.

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The demand far exceeds supply.