Dispelling concerns about AI demand, Wall Street remains bullish on Taiwan Semiconductor!

In the past few months, there has been a pervasive concern in the market about AI, and Taiwan Semiconductor has responded to this with strong performance. During yesterday's earnings call, Taiwan Semiconductor explicitly stated that "AI demand is real." This statement ignited market enthusiasm, with Taiwan Semiconductor's US stocks rising over 13% at one point.

Nomura pointed out in its latest analysis report that Taiwan Semiconductor's comments are consistent with its position, and this strong cycle is being driven by AI demand:

Taiwan Semiconductor's firm belief in AI is a highlight in its business outlook. As an "AI enabler," Taiwan Semiconductor believes it has captured orders from almost all leading AI companies, and Taiwan Semiconductor itself has also seen internal investment returns from AI research and development.

Strong AI demand supports Taiwan Semiconductor's N5/4/3 iteration trajectory. Management now expects AI revenue to more than triple by 2024, contributing to the mid-teens percentage range, which is a significant increase from the previous low double-digit guidance, driving approximately 30% revenue growth for the full year 2024.

It is worth mentioning that AI demand is driving Taiwan Semiconductor's progress in advanced processes, as mentioned by Barclays in their report:

AI continues to drive revenue growth, and Taiwan Semiconductor is sprinting ahead in advanced processes. Taiwan Semiconductor expects to have more capacity prepared for N2 than for N3, and reiterates that there is high demand for AI server chips with A16. Taiwan Semiconductor anticipates that the growth of N2 will require preparation costs, alleviating concerns about potential decreases in N2 capacity demand