TSMC Hopeful of a Boost in AI Industry Despite Share Market Falls
By Jose Resurreccion
Jul 18, 2024 10:10 AM EDT
Jul 18, 2024 10:10 AM EDT
The Taiwan Semiconductor Manufacturing Company (TSMC) said Thursday (July 18) that the rising demand of artificial intelligence (AI) is boosting its growth and capacity and is influencing its short-term forecast.
The Financial Times reported that the company raised its forecast to slightly over 25% revenue growth in US dollar terms from its previous prediction of between 20% and 25%.
TSMC reported a 36% increase in net profit for the second quarter to NT$247.8 billion ($7.6 billion), while its revenue jumped to NT$673.5 billion ($20.63 billion), an improvement to its forecast in the previous quarter.
New York's Nasdaq Composite index fell by 2.8% Wednesday (July 17), making the outcome the worst since December 2022. The S&P 500 also fared poorly at 1.4% lower, ending a three-session high streak.
Meanwhile, TSMC shares closed 2.4% lower in a Taipei stock market Thursday, which also affected the Taiex benchmark index by 1%.
It is understood that the outlook followed a two-day slide in technology shares after US Republican presidential candidate Donald Trump criticized Taiwan's chip industry.
Trump told Bloomberg in an interview two weeks before the assassination attempt against him that the country should pay for defense support for the United States, claiming that Taiwanese companies "stole" the US semiconductor business.
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Despite this perspective from Trump, TSMC's management deflected questions about potential risks from US policy, especially if Trump would win the presidential election later this year.
It could be recalled that TSMC was granted by the Biden administration $11.6 billion to boost its semiconductor manufacturing and establish a chipmaking facility in Arizona. In return, the company committed to investing an additional $65 billion to build three fabs and bring its most advanced chipmaking technology to the US by 2028.
TSMC chair and CEO CC Wei said that the company "have not changed" any of its original plans about its US expansion.
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