TSMC reported a record profit for the sixth consecutive quarter, with fourth-quarter revenue expected to rise 58% year-over-year, highlighting the intense demand for its advanced chipmaking technologies.
The company, which produces the majority of the world's advanced semiconductors for major tech firms like Nvidia, AMD, and Apple, is struggling to keep up with customer requests for wafer capacity. Analyst Jordan Klein from Mizuho Securities noted that the competition for chip supply is fierce, as companies aim to secure their place in the rapidly growing AI market.
TSMC's North American CEO, Sajiv Dalal, mentioned receiving at least 10 inquiries daily regarding wafer capacity, indicating the urgency among tech firms to ramp up their AI capabilities.
However, if demand continues to grow at this pace over the next 12 to 18 months, TSMC's capacity constraints could jeopardize the ambitious revenue targets set by AI companies and their substantial infrastructure investments, which are projected to exceed $700 billion this year.
TSMC is actively working to expand its manufacturing capacity with new fabs in Taiwan, Japan, and Arizona, committing $265 billion to this effort. Despite these expansions, analysts warn that the global shortage of memory chips and the complexity of TSMC's logic chips could hinder its ability to meet demand.
Additionally, competitors like Samsung and Intel may benefit from TSMC's capacity constraints, as companies seek alternative sources for chip manufacturing. Overall, TSMC's strategic position in the semiconductor market remains strong, but the ongoing demand pressures present significant challenges for the company and its customers