Over 50% of TSMC’s Revenue Now Comes From High-End Chips Including AI

TSMC Surges on AI Demand, HPC Revenue Now Dominates

Taiwan Semiconductor Manufacturing Co. (TSMC) has crossed a significant milestone by generating more than half its revenue from high-performance computing (HPC) for the first time, driven by the burgeoning demand in artificial intelligence (AI). In the June quarter, 52% of TSMC's wafer revenue stemmed from its HPC group. This shift underscores a pivotal transformation for the company, which historically relied heavily on Apple Inc.’s iPhone and the broader smartphone industry.

The swift pivot has positioned TSMC as the primary supplier for high-demand AI accelerators. The company's portfolio includes Nvidia Corp. and Advanced Micro Devices Inc.’s AI-training chips, as well as Qualcomm Inc.'s AI-enabled laptop processors for the latest Windows Copilot+ PCs. This strategic reorientation highlights the evolution from the smartphone-dominated era to the AI age, with smartphones now constituting just a third of TSMC's business—a significant decline from their longstanding majority share.

Impressive Financial Performance Amid AI Boom

TSMC's recent financial results surpass expectations, reflecting higher profit margins and improved outlooks for annual sales growth, largely fueled by the AI surge. HPC sales experienced a remarkable 28% sequential increase. CEO C.C. Wei emphasized the intense demand for AI integration across all customer devices, acknowledging the challenge in meeting this demand. “The demand is so high, I have to work very hard to meet my customers’ demand,” Wei stated. He expressed hope for achieving a balance between supply and demand by 2025 or 2026.

As the world's largest contract chipmaker, TSMC's strategic shift towards AI technology not only solidifies its market leadership but also sets a precedent for future growth trajectories, with AI poised to take on an even more dominant role in the coming years.