tsmc sees orders soar from top tech companies
Hsinchu, Monday, 23 December 2024.
Taiwan Semiconductor Manufacturing Company (TSMC) has witnessed a notable increase in orders from leading technology firms. This surge highlights the growing demand for TSMC’s advanced chip production capabilities. The influx of orders is expected to positively impact TSMC’s financial performance and stock value. Such a boost in demand underscores the company’s pivotal role in the tech industry, particularly as major players like Apple and NVIDIA continue to rely on its cutting-edge semiconductor technology. As TSMC strengthens its position in the global market, the company’s prospects appear promising, further solidifying its status as a key player in the semiconductor sector.
Record-breaking financial performance
TSMC’s market dominance continues to strengthen, with the company reaching a remarkable USD 1.6 trillion market capitalization in October 2024 [2]. The semiconductor giant reported impressive third-quarter results, with net profit surging 54.2% year-on-year to USD 325.26 billion and sales climbing 39% to USD 759.69 billion [2]. TSMC’s commanding position in the global foundry industry is evident through its 62.3% market share, including an overwhelming 92% share in advanced front-end processes [2].
Global expansion and strategic investments
TSMC is actively expanding its global footprint through strategic investments totaling USD 65 billion in the United States and significant developments in Japan and Germany [2]. The company’s expansion includes three plants in Arizona and facilities in Kumamoto, Japan, and Dresden, Germany [2]. This global diversification strategy aims to strengthen TSMC’s production capabilities while addressing geopolitical risks, as Bloomberg Economics estimates that a potential Chinese invasion of Taiwan could result in USD 10 trillion in economic losses [2].
AI chip dominance and customer relationships
TSMC has established itself as the cornerstone of AI chip production, manufacturing 80% of the world’s AI chips for industry leaders including Apple, Nvidia, Qualcomm, and MediaTek [2]. The company’s market position is further reinforced by exclusive relationships with key players, as evidenced by AMD CEO Lisa Su’s commitment to TSMC as their sole producer for new AI chips [2]. TSMC’s pricing power remains strong, implementing an 8% price increase for their advanced 3 and 5 nm chips [2].
Future outlook and technological leadership
TSMC Chairman C.C. Wei recently highlighted the company’s potential contribution to robotics development, leveraging its semiconductor manufacturing expertise [3]. With Taiwan producing over 60% of the world’s semiconductors, TSMC’s technological leadership positions it well for future growth [3]. Market analysts, including Felix Prehn, view TSMC’s increasing demand for AI technology as a positive indicator for continued market strength [5].