TSMC sales rise 45% from a year ago thanks to AI

Taiwan Semiconductor (TSM) shares are on the move Friday morning after the chipmaker revealed sales rose 45% year-over-year in July as demand for AI chips continues to flourish. The company is a supplier for Nvidia (NVDA), which has also seen its shares move slightly higher on Friday morning

Morning Brief Anchors Brad Smith and Seana Smith break down the latest update from TSMC and what it could mean for the chip sector.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video transcript

Taiwan Semiconductor shares are moving higher after its sales grew 45% in July.

That's up from that from just about a year ago.

The sales boost raising investor hopes on demand for a I chips.

And like we said earlier in the programme, this is often viewed as a bellwether here for a I demand.

So that's the reason why we're seeing obviously optimism play out in Taiwan Semiconductor today, but also when you take a look at NVIDIA, A. MD and the other chip makers there, uh, heavily involved with the A I space are also getting a bit of a boo.

So it's helping to drive that sentiment here across the board.

And remember that this is a supplier here for NVIDIA.

For a MD, it's a sole supplier of processors for Apple's iPhone, so again, just distracting some of that demand.

What we're seeing here for Taiwan Semiconductor obviously sets up a more bullish case here.

We're talking about lack of catalyst.

Maybe this is a small catalyst here for NVIDIA, at least in the short term.

You talk about a company that definitely hopes that I upgrade from my iPhone 12 pro Max at the end of the day, I am not helping out.

But they're hoping that in this upgrade cycle come September that I will be one of the catalysts or contributors for them continuing to strengthen their relationship with Apple.

All that aside here and we'll see if I upgrade, I'll report back on that.

Q three revenue is projected to grow 37% here.

There also might be some price hikes that are set to come forth here, and that is to be expected.

When you have this type of demand profile and the resources are really being tapped across the board for Taiwan semi, you get to pick and choose who you wanna work with.

You also get to pick and choose what the price is, and it seems like they're gonna lean into that also.

So as a part of the broader revenue projection growth that, uh, analysts are expecting out there, it sounds like high performance.

Compute is really expected to be the largest leader within this, uh, in this continued performance here that accounted for 52% of TSM CS revenue last quarter.

Um, and I believe first time that it's accounted for more than half of that as well.

Here.

Yeah.

We're looking at gains here across the board.

So some optimism as we wrap up what has been a, um, troublesome week challenging week.