(Bloomberg) -- Taiwan Semiconductor Manufacturing Co.’s revenue rose 45% in July, an early indication of strong demand for AI chips even as a global tech selloff underlined growing doubts about the technology’s potential.
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Sales for the month reached NT$256.95 billion ($7.9 billion). For the third quarter, analysts project TSMC revenue should grow 37% to NT$747.4 billion, with the July result suggesting TSMC may surpass those expectations.
TSMC is one of the key bellwethers for AI demand, as the go-to chipmaker for leading accelerator makers Nvidia Corp. and Advanced Micro Devices Inc. It’s also the sole supplier of processors for Apple Inc.’s iPhones, at a time the mobile device market is showing signs of bouncing off post-Covid era lows. Last month, the world’s largest contract chipmaker raised its full-year outlook to beyond the maximum mid-20% it had guided toward previously.
That was before worries about the global economic outlook prompted investors to cash out of some of the year’s biggest gainers, including the major tech companies at the heart of the AI boom. TSMC’s shares shed 10% of their value in one day, before recovering much of the drop as money managers saw a good buying opportunity.
Still, investors have started to question whether the billions of dollars Big Tech firms have invested in the infrastructure to support the AI boom will result in substantial returns, while a potential delay in Nvidia’s development of a new generation of AI chips is spurring concerns over the progress of the emerging technology.
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