Major Clients Drive TSMC's Revenue Growth to 30%

TSMC is experiencing a significant increase in orders for its advanced process technology, driven by strong demand from major clients including Apple, NVIDIA, AMD, and Qualcomm. As Apple ramps up production for the iPhone 16 series ahead of its launch, NVIDIA expands shipments of its H-series chips, and AMD and Qualcomm scale up their AI PC processors, analysts have raised their outlook for TSMC. The company is expected to exceed its revenue targets this quarter, with annual growth in 2024 likely to surpass expectations.

TSMC's revenue growth is being fueled by the continuous influx of orders from these four key clients and six popular chipsets, leading to a sharp rise in the second half of the year. The company's 2024 revenue growth is now projected to exceed 30%, up from the original forecast of 26% to 29%, potentially reaching 31% to 34%.

Although TSMC does not comment on individual clients, it is widely known that the company is the exclusive manufacturer of processors for Apple's iPhone 16 series. These orders are expected to be a major driver for TSMC's 3nm process technology. The iPhone 16 series is anticipated to fully adopt the new A18 and A18 Pro processors, rather than a mix of the A18 and the previous generation A17, further boosting demand for TSMC's advanced processes.

Analysts note that nearly 270 million iPhones globally are over four years old. If a significant portion of these users upgrade this year, it could exceed expectations, significantly strengthening TSMC's performance in the second half of the year.

In addition to the strong demand from Apple, NVIDIA has been expanding its orders with TSMC, despite reports of a slight delay in the mass shipment of its latest Blackwell platform AI chips. Demand for the existing Hopper platform H-series AI chips remains robust, further fueling TSMC's advanced process order growth.

Meanwhile, AMD and Qualcomm have also contributed to TSMC's surge in orders. Both companies are aggressively expanding their AI PC businesses, with AMD recently raising its revenue forecast for its MI300 AI chips. AMD CEO Lisa Su has highlighted that demand for AI chips has exceeded expectations, indicating a growing reliance on TSMC's advanced processes.

TSMC remains optimistic about the AI market's future. In an earnings call in April, TSMC Chairman Mark Liu extended the visibility of AI orders and their contribution to revenue from 2027 to 2028. TSMC's leadership in advanced process technology continues to provide a competitive edge, with analysts expecting strong revenue and profit growth as the company partners with most global AI application companies. Recent forecasts estimate that AI applications could account for 35% of TSMC's total revenue by 2028.