Taiwan Semiconductor Manufacturing Co (TSMC), a major supplier for Nvidia, shared optimistic projections for the global semiconductor industry, excluding memory chips, anticipating a 10% annual revenue growth. The company’s senior vice president, Cliff Hou, expressed confidence in the opportunities presented by the rise of artificial intelligence (AI) applications, referring to it as a new golden era.
However, earlier in April, both Nvidia and Apple had revised their outlook for the industry to a growth rate of around 10%, down from their initial expectation of over 10%. Despite this adjustment, global semiconductor trade statistics indicated a projected growth of 13.1% for the market by 2024.
TSMC credits the increasing demand for AI technologies for its anticipated 30% growth in second quarter sales. The company has plans to triple its 3nm capacity from 2023 to 2024 and boost its chip-on-wafer-on-substrate (CoWoS) capacity by more than 60% annually from 2022 to 2026. CoWoS is a packaging technology used for high-performance computing and AI components, a choice favored by Nvidia for its Blackwell project.
In the first quarter, TSMC saw a revenue growth of 16.5%, surpassing analyst expectations with advanced technologies contributing to 65% of the total revenue. Major tech companies like Microsoft have also heavily invested in AI infrastructure, with spending exceeding $32 billion in the first quarter of the year.
Investors interested in gaining exposure to the semiconductor sector can consider options like Direxion Daily Semiconductor Bull 3x Stock (SOXL) and Direxion Daily Semiconductor Bear 3x Shares (SOXS). As of the latest update, TSMC shares were trading at $160.11, up by 2.54%.
The overall positive outlook and strategic investments in advanced technologies position TSMC as a key player in the semiconductor industry, particularly in the AI segment. The company’s growth projections and expansion plans indicate a promising future in the rapidly evolving tech landscape.
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