Taiwan Semiconductor (TSMC), with its strategic vision and better-than-expected results for the September quarter, has once again affirmed strong demand for artificial intelligence chips. The chip giant’s projected capital expenditure rising from $30 billion in 2025 underscores the growing investments into chips that support AI models, instilling confidence in its future.
Strong AI Demand
The Taiwan chip giant posted a 54% increase in net profit that hit record highs of $10.1 billion. The increase was fuelled by a 36% increase in revenue that hit highs of $23.5 billion. The better-than-expected results come as the semiconductor giant serves some of the biggest companies, including Apple (AAPL) and Nvidia (NVDA), with advanced AI chips.
The company has since raised its 2024 revenue outlook to between $26.1 billion and $26.9 billion in the fourth quarter as it expects increased spending on AI chips from tech heavyweights including Amazon (AMZN) and Microsoft (MSFT). The hike also affirms the steady adoption of artificial intelligence, especially in the smartphone industry, which is expected to bolster Apple’s iPhone product line sales.
Taiwan Semiconductor is one of the biggest winners in the global race to develop artificial intelligence and is one of the largest manufacturers of sophisticated chips in the world. Since that boom began in late 2022 with the release of OpenAI’s ChatGPT, its shares have more than doubled. In the US, TSMC’s market valuation momentarily surpassed $1 trillion.
TSMC Chairman and CEO C.C. Wei have already reiterated that the demand for artificial intelligence is real and that the company is experiencing the deepest and widest growth of anyone in the industry. The Taiwanese chipmaker, whose cutting-edge chips are essential to a wide range of products from smartphones to AI applications, has been expanding its global manufacturing presence. Earlier this year, it opened its first factory in Japan and made a massive overseas investment of $65 billion for three chip plants in Arizona to meet U.S. demand.
However, some investors were wary of the direction of global AI spending even before ASML. Without a genuinely game-changing application, they wonder if major tech companies like Meta Platforms Inc. and Alphabet Inc. will keep spending money on chips and data centres.
Some investors are uneasy due to the dangers of overcapacity data centres and geopolitical concerns. Biden administration officials have talked about limiting the country-specific sales of cutting-edge AI chips from Nvidia and other American companies, fuelling a fierce tech war between the US and China.
AI Into Media
Meanwhile, Microsoft and OpenAI offer up to $10 million ($2.5 million in cash plus $2.5 million in “software and enterprise credits” from each) to a limited number of media organizations to test AI tools in the newsroom. With the funding, the media outlets could employ a two-year fellow who will use OpenAI credits and Microsoft Azure to develop and deploy AI tools.
The initiative is a component of a partnership between the Len fest Institute for Journalism, Microsoft, and OpenAI that aims to support local media. Three additional media organizations will receive grants from Microsoft and OpenAI in the future. The outlets will investigate a number of AI applications, such as using the technology for content summaries, transcription, and developing a conversational search engine.
