TSMC Sales Surge Past Expectations on AI Infrastructure Demand

(Bloomberg) — Taiwan Semiconductor Manufacturing Co.’s second-quarter sales were buoyed by the AI boom that’s fueling data center investment worldwide.

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The sole supplier of Nvidia Corp. and Apple Inc.’s most advanced chips said revenue for June came to NT$207.9 billion. That means 40% growth in the June quarter to NT$673.5 billion, versus the average projection for a 35.5% rise.

The Wednesday sales figure comes days after the world’s largest contract chipmaker briefly reached a $1 trillion market capitalization on a tide of investment into artificial intelligence-related data centers and devices. Businesses around the world are racing to buy up hardware such as Nvidia chips to build up AI-supporting infrastructure. That’s prompted Wall Street brokerages to lift their price targets for TSMC, citing the chipmaker’s potential move to charge customers more in 2025 to elevate earnings further.

The AI chip orders have helped make up for lackluster smartphone sales, which are only just emerging from a trough. Apple remains Hsinchu-based TSMC’s biggest customer.

Valuation concerns are tempering optimism on AI investor darling Nvidia, with a New Street Research analyst downgrading the stock earlier this week, saying it is “getting fully valued.”

TSMC and other AI-related stocks in Taiwan have helped lift the benchmark Taiex Index by more than 40% over the past 12 months, despite overarching concerns about US-China geopolitical tensions around the island.

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