Friday, August 9th 2024
Strong AI Chip Demand Pushes TSMC's July Revenue by 45% Year-over-Year
The demand for AI accelerators is going strong, and the world's largest semiconductor manufacturer, TSMC, has just confirmed that with its July 2024 revenue report. According to its latest July 2024 data, TSMC has reported a consolidated revenue of NT$256.95 billion, or about $7.94 billion at the time of writing. This represents a massive 23.6% jump from June 2024 and a 44.7% from July 2023, when revenue came in at NT$207.869 billion and NT$177.616 billion, respectively. For revenue throughout the year, measured from January to July, TSMC booked NT$1.523 trillion, or about $47 billion at the current rate. For this 7-month period, TSMC's revenue has increased by 30.5% Year-on-Year (YoY), showing great demand and an uptick in the company's production capabilities.
Of course, this is possible thanks to the massive demand driving AI chip sales from various startups and established giants like NVIDIA and AMD. Another vital customer for TSMC is Apple, which produces smartphone and Mac chips at Taiwanese facilities. The solid financial results from TSMC suggest that other fabless chip designers in its ecosystem may also experience positive outcomes in their earnings. It's worth noting that the semiconductor supply chain operates on a long-term planning basis, with arrangements made months in advance. As such, we can expect advanced silicon solutions to reach new customers in the coming months, further driving growth in the sector.
Source:
TSMC
Of course, this is possible thanks to the massive demand driving AI chip sales from various startups and established giants like NVIDIA and AMD. Another vital customer for TSMC is Apple, which produces smartphone and Mac chips at Taiwanese facilities. The solid financial results from TSMC suggest that other fabless chip designers in its ecosystem may also experience positive outcomes in their earnings. It's worth noting that the semiconductor supply chain operates on a long-term planning basis, with arrangements made months in advance. As such, we can expect advanced silicon solutions to reach new customers in the coming months, further driving growth in the sector.
25 Comments on Strong AI Chip Demand Pushes TSMC's July Revenue by 45% Year-over-Year
I STILL say "TSMC" stands for "The Smartest Manufacturing Company" !
The result exceeded market expectations, helping drive the stock 3.6% higher on the Seoul exchange Wednesday.
The conglomerate reported operating profit of 10.44 trillion Korean won (US$7.6 billion), up from KRW670 billion ($480 million) a year ago and KRW3.84 billion ($2.8 million) in Q1. Total revenue was KRW74.1 trillion ($54.1 billion), up 23%, with an EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 27%, up from 16% a year ago and 22% in Q1.
www.lightreading.com/ai-machine-learning/samsung-profit-skyrockets-on-surging-memory-demand
So if this part of the article is true - "For revenue throughout the year, measured from January to July, TSMC booked NT$1.523 trillion, or about $47 billion at the current rate." - Samsung had more revenue in the last quarter than TSMC has had all year.
TSMC appears to have the best people when it comes to taking a design from one of their customers and turning it to a successful, mass produced chip. That said, TSMC has had its fair share of issues over the years too, but seemingly never as bad as Samsung and to some part Intel.
Also keep in mind that the tools from ASML is just one part that is involved in these fabs, there's tooling from a bunch of other companies involved as well, plus materials suppliers that can make a difference.
The article even says:Like, yeah. We all know HBM is like crack coated muffins with how much it is in demand. But nothing suggests Samsung is any closer to getting any significant contracts for their new foundry nodes. In fact, I don’t think they had any at all since Ampere.
"The DS Division posted KRW 28.56 trillion in consolidated revenue and KRW 6.45 trillion in operating profit for the second quarter."
Roughly $21B is sales and $4.7B in profit in chips. They aren't struggling."The System LSI Business posted record-high sales for the first half of the year as it saw earnings improve in the second quarter due to increased supply of key components such as systems on chips (SoCs), image sensors and display driver ICs (DDIs) for major flagship products."
"The Foundry Business saw improved earnings as a result of increased demand across applications. Due to higher orders for sub-5nm technology, the number of AI and high-performance computing (HPC) customers increased twofold from a year earlier. The Foundry Business also distributed the process development kit (PDK) for 2nm Gate-All-Around (GAA) technology to customers ahead of mass production in 2025.
In the second half, the Foundry Business expects a rebound in mobile demand and continued high growth in demand for AI/HPC applications. As a result, the foundry market is expected to experience growth overall, particularly in advanced nodes. For 2024, on the back of full-scale mass production of second-generation 3nm GAA technology, the Company expects growth to outpace the market."
Samsung System LSI isn’t the foundry business. That would be the aptly named Samsung Foundry division, to be precise. They are both part of Samsung Semiconductors though, true.
www.techpowerup.com/325088/samsung-electronics-announces-results-for-second-quarter-of-2024This is the LSI BU, but it and the foundry BU are both listed under Samsung Semiconductor as you say, with memory being a separat BU again.
semiconductor.samsung.com/about-us/business-area/system-lsi/ASML actually made a lot of that tooling as well though, but at least they had competitors, to a point when they just exceeded all their competitors in terms of equipment quality and performance.This is all nice, but Samsung keeps proving that the yields they reach aren't good enough for their customers, so they keep going back to TSMC.
Apple, Nvidia, Qualcomm and others have tried to save some money by going to Samsung, but their nodes never deliver what they promise.
Until Samsung solves that problem, which is a pretty major one, they're always going to be a tier two foundry.
Yeah, I saw that link too, but the SamSemi site is a bit weird and the foundry services are a separate tab:
semiconductor.samsung.com/foundry/
Also interesting how there are four fabs are listed as “Advanced Node” on here:
semiconductor.samsung.com/foundry/
Which is fair enough, but I was under the impression that the Taylor site is yet to enter mass production at all.
In the same way, if you buy top-tier Kitchenaid stand mixer, it's not going to make you a world-class pastry chef. Same with hammers, scalpels, paintbrushes, whatever.
There are a lot of things that determine the final product. Chip design is one but not the only factor. We saw that with Nvidia's Ampere generation with Samsung as the foundry: lots of transient spikes. And Nvidia switched back to TSMC.
Anyhow this shows how much the people who really know about chips value TSMC's capabilities.
One that'll generate the hundreds of billions needed to make the numbers work. To me, the whole llm technological approach to "AI" is fundamentally flawed. But we'll see I guess.
IBM still develops stuff, about two years ago they demonstrated a 2 nm test chip, but I don't know if they still are a part of any alliance. Probably they sell the IP to any interested party.
There are many other usage cases for AI other than LLM; many of these non-LLM applications have been used by large corporations and governments for several years now.
Judging AI solely by the consumer chatbots (like ChatGPT) that are heavily covered in mainstream news is not a sane way of assessing the viability of the AI industry.
It's worth point out that something like Apple's A-series or M-series SoCs are not strictly AI chips anyhow. They have machine learning transistors (and have since 2017) but the entire chip isn't solely dedicated to AI. These chips also have a CPU, GPU, security processor, media encoding/decoding engines and other differentiated silicon. In fact, the Neural Engine (Apple's name for their ML cores) is probably no more than 10-15% of the total die area.
This would be the same with other mobile SoCs whether it be Samsung, Qualcomm, whoever.
It was called the Common Platform or CP for short.
www.prnewswire.com/news-releases/2011-common-platform-technology-forum-to-feature-leading-edge-manufacturing-solutions-from-ibm-samsung-and-globalfoundries-111185409.html
What has happened, is that there's been a feedback loop, between day trading investors, algos, "AI" being mentioned by corporations boosting their stock price for the last year. So management at Microsoft, Google, Meta et al, have spent tens of billions on chips, because doing so will boost their stock price...
Not because there is anything particularly useful they can do with any of the hardware, none of it is demand lead on the front end. Now investors are starting to question why they've spent all these billions. You can see Google trying to shove Gemini down your throat and Microsoft desperately pushing copilot all over...
From what I can see, the technology is fundamentally flawed due to the hallucination issue, there's no intelligence there, so you end up with lots of inaccurate nonsense and non contextual results, especially from Gemini in my experience.
If we really want to pursue "AI", it seems unlikely to me it's going to come from this technological angle. Rather, an entirely new branch of technology based on a novel approach, one that starts with reasoning. Not brute forcing with lots of data but no understanding of any of it, like a $100bn+ parrot.
Unrelated but ... I've heard from people who own 0€ ... 50€ parrots that these birds can do more than just parroting. They have some level of understanding of human words, to the point they seem to "answer questions". See this one too. And I'm not very much surprised. Some birds are considered quite intelligent and they use a complex language of their own to communicate.
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Right?