TSMC’s Sales Beat Estimates After War Fails to Dent AI Demand

2riaz892z{383uw6ljd{0{a{_media_dl_1.png BloombergArticle content(Bloomberg) — Taiwan Semiconductor Manufacturing Co. reported a 35% increase in quarterly revenue, suggesting global AI chip demand remained intact during the first weeks of war in the Middle East.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentRevenue for the three months through March rose to NT$1.13 trillion ($35.6 billion), the main chipmaker for Nvidia Corp. and Apple Inc. said Friday in a statement. Analysts estimated NT$1.12 trillion on average. Sales in March rose 45%.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe report may help quell concerns that a prolonged crisis in the Middle East will dampen demand for power-hungry AI data centers and gadgets like the iPhone. The war has put pressure on global shipping routes and energy prices, and investors are looking for clues as to whether its impact will spread to tech giants’ spending plans.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentTSMC and AI customers such as Nvidia also face increasing skepticism that they can keep growing at current rates. After explosive sales turned Nvidia into the world’s most valuable company and TSMC the most valuable company in Asia, investors are seeking assurances that booming AI spending can be maintained.Article contentWhat Bloomberg Intelligence SaysArticle contentTSMC’s 1Q results are likely to beat the guidance midpoint — and consensus — given sustained strong demand for 3- and 5-nanometer nodes used in AI accelerators and networking-chip production. Favorable appreciation of the US dollar against New Taiwan Dollar provide a further tailwind. We calculate the gross margin can reach a record high of 65% at least.Article contentThe earnings-call focus will be on management’s view on Android smartphone and PC demand (especially whether higher memory costs might prompt another inventory correction); If fab operations and the 2H margin could be pressured by any disruption to chemicals or energy supply, or higher related costs. Another item to watch will be if sustained, multiyear AI chip demand and strength in leading-edge nodes supports raising the long-term gross-margin target above 58%.Article contentArticle content– Charles Shum, analystArticle contentClick here for researchArticle contentTSMC is set to report full first-quarter results on April 16. Taiwan’s largest company, which makes the vast majority of the world’s most advanced semiconductors, is a primary beneficiary of a global race to build AI infrastructure as it serves the likes of Nvidia, Advanced Micro Devices Inc. and Broadcom Inc. Shares of TSMC have gained almost 30% this year, outperforming its major customers.Article contentBut major tech companies have struggled to fulfill investors’ sky-high hopes, after Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. earmarked $650 billion for AI expenditures this year. Shares of Nvidia are down 1.4% this year even after the global AI chip leader delivered an outlook that beat estimates, on top of a 73% jump in quarterly revenue.Article contentTrending BYD to open 20 car dealerships in Canada this year Autos Why are Canadian bond yields surging? Finance Posthaste: How the U.S. dollar stole the Canadian dollar's petrocurrency thunder News 'Time to shift that narrative' — RBC to launch $1-billion fund to help Canadian businesses grow Banking How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. BYD to open 20 car dealerships in Canada this year Autos Why are Canadian bond yields surging? Finance Posthaste: How the U.S. dollar stole the Canadian dollar's petrocurrency thunder News 'Time to shift that narrative' — RBC to launch $1-billion fund to help Canadian businesses grow Banking How the global energy crisis is shaking Canada from coast to coast — and could leave a lasting legacy Oil & Gas