AI Boom Propels Taiwan Semiconductor Sales to Record Highs – Will Prices Increase in 2025?

Taipei, Taiwan – Taiwan Semiconductor Manufacturing Co. reported a significant increase in second-quarter sales, thanks to the rising demand for AI technology driving investments in data centers globally. In June alone, the company generated NT$207.9 billion ($6.4 billion) in revenue, marking a 40% growth in the quarter to a total of NT$673.5 billion, surpassing analysts’ expectations of a 35.5% increase.

The surge in sales comes as TSMC, the primary supplier of chips for industry giants such as Nvidia Corp. and Apple Inc., experienced a boost in market value, briefly reaching a market capitalization of $1 trillion. The influx of investments in AI-related data centers and devices has propelled the demand for TSMC’s advanced chips, particularly from businesses looking to enhance their AI infrastructure with Nvidia chips.

Although smartphone sales have been lackluster, the steady flow of AI chip orders has helped offset this decline, with Apple maintaining its position as TSMC’s top customer. TSMC, along with other AI-related stocks in Taiwan, has significantly contributed to the Taiex Index’s growth by over 40% in the past year, demonstrating the market’s confidence in the semiconductor industry despite geopolitical tensions.

Analysts remain optimistic about TSMC’s strong performance in the second quarter, highlighting the robust demand for CoWoS advanced packaging and the potential for price increases in the future to boost earnings further. However, concerns about valuation have surfaced, specifically regarding Nvidia, which saw a significant increase in its stock value this year, leading to some analysts downgrading the stock due to being “fully valued.”

Overall, TSMC’s impressive sales growth in the second quarter reflects the increasing reliance on AI technology across various industries, driving investments in cutting-edge semiconductor solutions. As the demand for advanced chips continues to rise, TSMC remains well-positioned to capitalize on this trend, setting the stage for continued growth and innovation in the semiconductor sector.