As global demand for AI chips skyrockets in 2024, TSMC has emerged victorious. Earlier this month, Taiwan Semiconductor Manufacturing Company exceeded revenue and profit projections in Q2, raising $247.85 billion in net income and $20.82 billion in revenue. The surge in demand for AI chips has contributed to a near 70% hike in TSMS’s Taiwan-listed shares in 2024.
TSMC’s global footprint in the AI space stands as a testament to his diversified chip offerings that cater to the computing needs of Nvidia and Apple. Paving the path in the foundry industry, TSMC currently produces 3-nanometer chips and intends to mass-produce 2-nanometer chips in 2025. These smaller nanometer sizes promise more powerful and efficient chips. Brady Wang, associate director of Counterpoint Research, stated that “the demand for generative AI is surging in the cloud and at the edge. TSMC’s N3 process boasts good yield rates and well-managed production lines. The market is well-funded, and regional political factors drive increased demand for advanced processes.”
Counterpoint data also confirms that TSMC held 62% of the global foundry market share in Q1 of 2024, compared to a 59% share in the same period in 2023. Needham analysts reiterated the “buy” sentiment attached to TSMC’s US-listed shares, raising its price target from $168 to $210.
However, TSMC’s chart-breaking success came to a sudden halt after Biden announced stringent curbs on the export of semiconductor infrastructure from China. According to a Bloomberg report, the Biden administration intends to scrutinize every minor aspect of American technology used in foreign-manufactured products. Former President Trump’s demanded remunerations from Taiwan in exchange for American protection against China. “We’re [the US] no different than an insurance company. Taiwan doesn’t give us anything,” said Trump to Bloomberg Business earlier this week.
