TSMC bets on AI boom to drive long-term growth

Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, expressed confidence in its growth prospects over the coming years, citing strong demand for computing power and advanced semiconductors driven by the global AI boom.

Speaking at TSMC’s annual shareholders’ meeting in the northern Taiwanese city of Hsinchu on Thursday, Chief Executive Officer C.C. Wei said the company continues to benefit from expanding AI adoption across multiple sectors, while also keeping a close watch on rising component costs, News.Az reports, citing Reuters.

“We continue to see increasing adoption of AI models across consumer, enterprise and sovereign AI applications,” Wei said.

“This trend is driving demand for greater computing power, which in turn supports strong demand for advanced semiconductor chips.”

When asked whether TSMC could raise prices for its customers, Wei indicated that the company was open to the possibility but would take a measured approach.

“I'd like to do that ... we still need to make money,” he said.

However, Wei emphasized that TSMC is committed to maintaining a long-term business strategy rather than implementing sharp price increases.

“We don't want to suddenly raise prices like memory companies do. That's not sustainable. TSMC is focused on long-term, sustainable operations. We're not that kind of company,” he added.

Wei also said the company is working intensively to meet growing customer demand, particularly in the United States. However, he acknowledged that it will take a “very long time” for TSMC’s U.S.-based manufacturing operations to fully satisfy the needs of American customers. He did not provide a specific timeline.

TSMC is currently investing $165 billion in new semiconductor manufacturing facilities in Arizona as part of its broader expansion strategy in the United States.

Reflecting on the company’s recent performance, Wei described the past year as exceptional. He noted that TSMC’s share price had risen to T$2,425 by Wednesday, compared with T$950 on June 3 last year.

Despite the strong annual performance, TSMC shares were down about 1% on Thursday, broadly matching the decline in Taiwan’s benchmark stock index.

Addressing employee compensation, Wei said TSMC remains fully committed to rewarding its workforce amid growing scrutiny of how technology companies share the financial benefits of the AI-driven boom.

His remarks came as labor issues remain in focus across the technology sector, including in South Korea, where Samsung Electronics recently reached an agreement with its union to avoid a strike.

According to Wei, employee profit-sharing at TSMC increased by approximately 30% from 2023 to 2024 and is expected to rise by another 30% between 2024 and 2025.

“We are confident it will rise by another 30% in 2026,” he said.

“We believe this represents strong compensation for our employees,” Wei added, noting that there is no predetermined limit on future growth in employee profit-sharing and that the program will continue expanding alongside the company’s performance.

The comments highlight increasing pressure on major technology companies benefiting from the AI revolution to distribute a larger share of their rapidly growing profits to employees.

Looking to the future, Wei identified autonomous vehicles and robotics as key long-term growth opportunities for TSMC. He said the company would continue investing in technologies needed to support the development and success of advanced robotic systems.

Wei also reiterated the strategic importance of Taiwan to the company, describing the island as TSMC’s most efficient manufacturing base and home to its strongest talent pool, core research and development operations, and largest production facilities.

Taiwan has been at the center of global technology discussions this week as it hosts the annual Computex conference, which has attracted executives from some of the world’s leading technology companies.

Industry leaders from companies such as Nvidia and Intel have praised Taiwan’s critical role in the global technology supply chain during the event.

In April, TSMC, a major supplier to Nvidia, raised its annual revenue forecast and announced plans to increase capital expenditures this year in response to persistent and growing demand for its semiconductor products.

News.Az 

By Nijat Babayev