Investing.com – AI giant NVIDIA (NASDAQ:NVDA) tapped a new all-time of $140.89 in intra-day trading Thursday following solid results from contract chipmaker Taiwan Semiconductor Manufacturing (NYSE:TSM), which counts NVIDIA as one of its largest customers.
TSMC reported that third-quarter revenue increased 39.0% year-over-year, while net income and diluted EPS both increased 54.2%. The company cited strong smartphone and AI-related demand.
On its call, while not directly discussing NVIDIA, TSMC’s CEO C.C. Wei said, “[w]e continue to observe extremely robust AI related demand from our customers throughout the second half of 2024, leading to increasing overall capacity utilization rate for our leading 3 nanometer and 5 nanometer process technologies.” They now forecast the revenue contribution from server AI processors to more than triple this year, and account for mid-teens percentage of our total revenue in 2024. As a result, TSMC now forecasts that its full-year revenue will increase by close to 30% in US dollar terms.
When asked if the AI demand is real and sustainable, Wei said it is “real.”
“And why I say it’s real? Because we have our real experience. We have used the AI and machine learning in our fab, in R&D operations. By using AI, we are able to create more value by driving greater productivity, efficiency, speed, qualities,” Wei added.
As an example, the CEO highlighted that a productivity gain of just 1% would amount to $1 billion to TSMC.
“And think about it, let me use 1% productivity gain,” Wei said answering a question about AI demand being sustainable. “That was almost equal to about $1 billion to TSMC. And this is a tangible ROI benefit. And I believe we are — we cannot be the only one company that have benefited from this AI application. So I believe a lot of companies right now are using AI and for their own improving productivity, efficiency, and everything. So I think it’s real. Did I answer your question?”
Shares of NVIDIA are up 2.3% intra-day and are now up 179% year-to-date.
