The world’s leading chipmaker, Taiwan’s TSMC, has predicted a “golden age of opportunity with AI”, after an upbeat earnings forecast from leading chip designer Nvidia.
Taiwan Semiconductor Manufacturing Company, as the group is formally known, forecast on Thursday that the global chip industry, excluding memory chips, would enjoy annual revenue growth of 10%.
“This is a new golden age of opportunity with AI,” senior vice-president Cliff Hou, who was speaking at an event in Hsinchu, where the company is headquartered, said.
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TSMC is a major supplier to both Nvidia and Apple, America’s two biggest tech conglomerates. And Hou’s remark came after a stronger-than-expected revenue forecast from Nvidia late on Wednesday US time, which lifted shares of the AI chipmaker and other tech stocks.
TSMC has estimated second-quarter sales may rise as much as 30% as it rides a wave of demand for semiconductors used in artificial intelligence applications (AI).
World Semiconductor Trade Statistics, meanwhile, has forecast growth of 13% for the global semiconductor market in 2024.
Nvidia shares top $1,000 on AI optimism
Technology stocks have gained sharply since last year, led by Nvidia amid optimism over AI.
Nvidia forecast that its quarterly revenue would be above estimates and announced a stock split, lifting shares to a record-high territory and impressing investors who have tripled the chipmaker’s market value over the past year.
Nvidia shares had risen by 91% this year prior to the close of US trading, and jumped 5.9% to $1,005 in extended trade, peaking above the psychologically important $1,000 mark and adding about $140 billion in stock market value.
The Santa Clara, California-based company said it would split its stock ten-for-one, on June 7. It also said it was raising its quarterly dividend by 150% to 1 cent per share, on a post-split basis.
“Death, taxes, and NVDA beats on earnings. Even in the face of huge expectations, the company once again stepped up and delivered,” Ryan Detrick, chief market strategist at Carson Group, said. “The always important data centre revenue was strong, while future revenue was also impressive.”
Nvidia’s earnings report could add fresh fuel to a stock market rally that has lifted indexes to record highs this year.
Following Nvidia’s results, shares of rival AI-related chipmakers Advanced Micro Devices and Broadcom each rose about 2%.
Alphabet, Microsoft, Amazon.com and other technology companies have been competing for a limited supply of Nvidia’s high-end chips as they race to dominate AI computing.
During a conference call with analysts, CEO Jensen Huang said Nvidia’s upcoming Blackwell AI chips will ship in the current fiscal quarter, with production increasing in the following quarter.
Chief financial officer Colette Kress said demand for Blackwell chips could exceed supply “well into next year.”
Nvidia’s contract chipmaker TSMC has been working to increase its advanced packaging capacity, a key supply-chain constraint for the processors. The Taiwanese gropu said in April it expects to more than double its advanced packaging capacity this year.
Nvidia forecast fiscal second-quarter revenue of $28 billion, plus or minus 2%. Analysts on average were expecting revenue of $26.66 billion, according to LSEG data.
- Reuters with additional editing by Jim Pollard
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