TSMC forecasts jump in second-quarter sales

Taiwan Semiconductor Manufacturing Co said on Thursday it expects sales to jump in the second quarter on strong demand.

The world’s largest chip maker said second-quarter sales were likely to come in between US$19.6bn and US$20.4bn, an increase of up to 30%.

The update came as TSMC, a major supplier to Apple, posted first-quarter numbers showing a near 17% year-on-year increase in net sales, to NT$592.6bn (US$18.3bn), in the three months to 31 March.

Net income jumped 9% to NT$225.5bn, ahead of expectations for around NT$218bn.

However, compared to the fourth quarter of 2023, revenues eased 5.3% and net income nearly 6%.

Wendell Huang, chief financial officer, said: “Our business in the first quarter was impacted by smartphone seasonality, partially offset by continued high performance computing-related demand.

“Moving into the second quarter, we expect our business to be supported by strong demand for our industry-leading 3mm and 5mm technologies, partially offset by continued smartphone seasonality.”

Chief executive CC Wei said: “Almost all of the AI innovators are working with TSMC to address the insatiable AI-related demand for energy efficient computing power.

“AI-related data centre demand is very, very strong.”

Joshua Mahony, chief market analyst at Scope Markets, said: “We have seen some grounds for optimism from the world’s largest chip manufacturer.

“Recently viewed as a key barometer of AI chip demand, there is a hope that the likes of Nvidia and Arm Holdings will see the buyers step in once again on the hope that we will see a similarly upbeat tone when they report in the coming weeks.”