NVIDIA’s intentions to raise $11 billion in the current quarter instead of the $7 billion predicted by analysts for a short moment increased the company’s capitalization to $1 trillion, but in relation to TSMC serving its interests, such investor optimism would be inappropriate, according to experts. This year, the topic of artificial intelligence will increase the Taiwanese company’s revenue from strength by a few percent, they are convinced.
At least, representatives of JP Morgan and Bernstein demonstrate such solidarity in their statements, according to Barron’s. The former believe that by the end of the current year, the AI direction will form no more than 5% of TSMC’s revenue. The company’s earnings per share on the wave of interest in artificial intelligence technologies will not be able to significantly increase this year, as the market for these systems is in its infancy, and TSMC’s revenue is more affected by negative trends in the consumer electronics and PC segment.
Speaking directly about NVIDIA products, which in the case of AI systems are completely produced by TSMC, JP Morgan representatives estimate the need for the first of the companies in core components at 1.6 or 1.8 million units by the end of the current year. This is not much, and TSMC’s revenue from fulfilling NVIDIA’s orders in this case will be significantly lower than the amount that the latter will receive when selling its accelerators to customers. In this case, NVIDIA’s software components form a significant added value.
TSMC controls about 59% of the global contract chip manufacturing market, and therefore a general economic downturn will have a much stronger impact on its business than a narrowly focused rise in the artificial intelligence segment. Representatives of Bernstein also believe that TSMC’s core revenue this year will be measured by strength in units of percent of the total. Of the revenue received by NVIDIA in the direction of AI, literally crumbs will fall to the contractor represented by TSMC.
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