What's Going On With Apple Supplier Taiwan Semi Stock On Thursday?
Portfolio Pulse from Anusuya Lahiri
Taiwan Semiconductor Manufacturing Co (TSMC) exceeded Q1 financial expectations with a 16.5% revenue increase to $18.87 billion, driven by robust demand from AI firms. Despite this, TSMC's stock declined after the announcement. Apple and Nvidia are significant clients, with Apple reserving most of TSMC's 2nm production capacity. TSMC forecasts strong demand for its 3nm and 5nm technologies in Q2, expecting revenue between $19.6 billion and $20.4 billion. The company anticipates AI servers to double their revenue contribution in 2024, with a capital expenditure forecast of $28 billion to $32 billion focused on advanced technologies.
April 18, 2024 | 4:47 pm
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POSITIVE IMPACT
Apple, as TSMC's largest client, has secured most of TSMC's 2nm production capacity, highlighting its reliance on TSMC for advanced processors.
Apple's significant reservation of TSMC's production capacity for advanced processors indicates a strong partnership and potential for future growth, positively impacting Apple's innovation and product offerings.
CONFIDENCE 85
IMPORTANCE 85
RELEVANCE 80
POSITIVE IMPACT
Nvidia, accounting for about 11% of TSMC's revenue, is highlighted as a critical customer, benefiting from TSMC's advanced manufacturing capabilities.
Nvidia's reliance on TSMC for about 11% of its revenue underscores the importance of TSMC's advanced manufacturing capabilities for Nvidia's product development and market competitiveness.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 70
POSITIVE IMPACT
Investors can gain exposure to TSMC through the VanEck Semiconductor ETF, which includes TSMC as part of its holdings.
The VanEck Semiconductor ETF, holding TSMC stock, provides investors an indirect path to benefit from TSMC's market performance, making it an attractive option for those looking to invest in the semiconductor industry.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
TSMC surpassed Q1 expectations with significant revenue growth, driven by AI demand. Stock declined post-announcement, but strong Q2 forecasted.
TSMC's financial performance and optimistic outlook, especially in AI and advanced technologies, suggest a positive trajectory. However, the immediate stock price drop indicates market reactions may vary short term.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
POSITIVE IMPACT
TSMC's performance also impacts the Vanguard FTSE Emerging Markets ETF, offering another investment avenue for exposure to TSMC.
Given TSMC's influence in the emerging markets sector, the Vanguard FTSE Emerging Markets ETF represents a strategic investment option for those seeking exposure to TSMC and diversification.
CONFIDENCE 70
IMPORTANCE 55
RELEVANCE 40