Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, anticipates a revenue growth of up to 25% in 2024, driven by robust demand for advanced chips catering to high-performance computing (HPC) and artificial intelligence (AI) applications. The company reported a 4.5% contraction in revenue to NT$2.16 trillion (U.S.$68.42 billion) in the previous year, primarily attributed to an inventory correction cycle among customers.
TSMC’s CEO, C.C. Wei, stated at an investors’ conference in Taipei that the company expects a low-to-mid 20% increase in revenue in U.S. dollar terms for the full year of 2024. The chipmaker, serving major clients like Nvidia and Apple, is a key supplier of semiconductor components for AI devices, with plans to have AI-related revenue account for over a high-teens percentage of its overall revenue by 2027.
Wei noted a sudden surge in demand since the fourth quarter of the previous year, particularly for AI-related products, highlighting TSMC’s collaboration with various AI innovators. The company anticipates that 3-nanometer chips will constitute 15% of its total revenue in 2024, compared to 6% in the previous year.
Considering the heightened interest in its 2-nanometer technology due to strong AI-chip demand, TSMC is contemplating the addition of another 2-nanometer chip fabrication plant in Kaohsiung. The chipmaker is also evaluating the construction of a second fab in Kumamoto, Japan, focusing on 7-nanometer or 16-nanometer technology.
TSMC clarified that its geographical expansion is not shifting from the U.S. to Japan, despite adjustments to the timeline for its Arizona operations. The construction of its first fab in Germany is set to commence in the fourth quarter of this year.
In terms of capital expenditures, TSMC plans to allocate between U.S. $28 billion and U.S. $32 billion this year, following last year’s total of U.S. $30.45 billion. The chipmaker expects a sequential dip of about 6.2% in revenue for the current quarter due to seasonal factors, projecting a gross margin ranging from 52% to 54%.