Artificial intelligence blew up TSMC’s valuation
Despite the lackluster results in the third quarter of 2023, Tsmc entered the ranking of the ten most valuable companies in the world. Thanks to the boom in artificial intelligence, which increases demand for advanced chips. All the details
The Taiwanese company TSMC, the largest semiconductor manufacturer in the world, recently returned to the ranking of the ten most valuable companies globally. The list is dominated by US technology companies, such as Microsoft, Apple Alphabet and Amazon, but a microchip manufacturing company also appears: the American NVIDIA.
Like NVIDIA, TSMC also thinks that artificial intelligence – given the computing power required by systems that use this technology – will drive its growth in the coming years; to ride the momentum, then, it is planning a massive expansion of the workforce.
TSMC currently has approximately 77,000 employees worldwide, but plans to reach 100,000 within a few years, Lora Ho, vice president of the company's human resources division, told CNN .
THE TSMC SITUATION
It is estimated that TSMC creates 90 percent of the advanced microchips in the world: its customers include Apple and NVIDIA itself, which will also rely on the Taiwanese company for the manufacturing of the new Blackwell processors .
Despite its dominant position in the foundry sector (this is the name for the factories where microchips are actually built) and despite the sophistication of its manufacturing technologies, in the third quarter of 2023 TSMC reported the largest decline in profit since 2019. The decline is mainly due to the decrease in demand for the electronic devices produced by its customers, which contain semiconductors made by TSMC. Nonetheless, the markets' enthusiasm for artificial intelligence has pushed up the valuation of the company's shares, which have risen 37 percent so far this year, writes Quartz .
TSMC CEO CC Wei stated that “TSMC is a key enabler of AI applications […]. Therefore, the value of TSMC's technology position is increasing and we are well positioned to capture the largest portion of the market."
INTERNATIONAL EXPANSION
In February TSMC, through its subsidiary Japan Advanced Semiconductor Manufacturing, opened its first microchip factory in Japan , which is expected to come online by 2024. Over the next two years the company will build a second plant in the country, for a tens of billions of dollars investment.
TSMC will also open a $40 billion factory in Arizona, in the southwestern United States, but is having trouble finding skilled workers. Another semiconductor company linked to NVIDIA is focusing on the United States: it is the South Korean SK Hynix , which could invest 4 billion for an advanced chip packaging plant in Indiana; it is estimated that the structure will be active in 2028.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/valore-mercato-tsmc-intelligenza-artificiale/ on Fri, 29 Mar 2024 06:28:17 +0000.