(Bloomberg) — Taiwan Semiconductor Manufacturing Co. (TSM, 2330.TW) raised its target for 2024 revenue growth after quarterly results beat estimates, allaying concerns about global chip demand and the sustainability of an AI hardware boom.
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The main chipmaker to Nvidia Corp. (NVDA) and Apple Inc. (AAPL) now expects sales to climb 30% this year, up sharply from previous projections for a maximum mid-20% rise. That’s after TSMC reported better-than-predicted earnings for the September quarter. It foresees capital expenditure of a little more than $30 billion in 2024 — in line with previous expectations.
Yet even before ASML, some investors have grown cautious about the sustainability of global AI spending. They question whether big tech firms like Meta Platforms Inc (META). and Alphabet Inc. (GOOG, GOOGL) will continue to splash out on AI chips and data centers without a truly killer AI application.
The risks of data center over-capacity and geopolitical issues have unnerved some investors. Bloomberg reported this week that Biden administration officials have discussed capping sales of advanced AI chips from Nvidia and other American companies on a country-specific basis.
For now, TSMC appears to be pursuing a rapid international expansion.
It’s planning more plants in Europe with a focus on the market for artificial intelligence chips, according to a senior Taiwanese official. That’s on top of construction underway in Japan, Arizona and Germany.
—With assistance from Vlad Savov, Cindy Wang and Mayumi Negishi.
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