Semiconductor manufacturer Taiwan Semiconductor Manufacturing Co., Ltd. (TSM) (TSMC) reported a significant 34% year-on-year increase in sales in November, reaching NT$276.06 billion. However, sales were down 12.2% sequentially. The mixed results sent the company’s stock down 1.2% in pre-market trading today.
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Meanwhile, in the first 11 months of 2024, TSMC’s revenue totaled NT$2,616.15 billion, an increase of 31.8% year-on-year. This increase is driven by high demand for chips used in artificial intelligence (AI) applications.
TSMC’s performance driven by the AI boom
TSMC’s strong performance in November reflects the company’s strong position in the AI field. As a key supplier to major technology companies such as Apple (AAPL) and Nvidia (NVDA), the company continues to benefit from strong demand for advanced computing devices and AI-driven solutions.
Interestingly, the company is also benefiting from the recovery in the semiconductor industry. According to research firm TrendForce, TSMC captured a 64.9% share of the global wafer foundry market in the third quarter of 2024, up from 57.9% in the same period in 2023.
To further strengthen its position, TSMC is making significant investments to expand its manufacturing capacity. The company plans to begin mass production of 2-nanometer chips at its Hsinchu factory in Taiwan next year. TSM is also expanding its global footprint with new manufacturing facilities in Arizona, Germany and Japan. These efforts will help the company meet growing chip demand and maintain its leadership position in the semiconductor industry.
Is TSM a buy, sell, or hold?
Turning to Wall Street, TSM receives a consensus rating of Strong Buy, based on 5 Buy assignments over the past three months. TSMC’s average price target is $232.50, suggesting 16.73% upside potential. The company’s stock price has increased more than 93% since the beginning of the year.
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