CC Wei, CEO of TSMC, recently shared insights on the semiconductor market outlook, highlighting the potential impact of macroeconomic and geopolitical uncertainties on consumer behavior. According to Wei, these factors could lead to a softer and more gradual recovery in 2024, affecting end-market demand. Despite these challenges, Wei pointed out that TSMC is seeing a gradual recovery in the smartphone and PC markets, complemented by robust AI-related data center demand that is particularly favorable for the company.
During an analysts' conference call discussing TSMC's 1Q24 financial results, Wei revised the forecast for the overall semiconductor market growth in 2024, excluding memory. The company now anticipates an approximate 10 percent year-over-year increase, with the foundry industry expected to grow in the mid- to high-teens percent range. These projections take into account the inventory correction and low base of 2023, setting the stage for a healthier growth trajectory in 2024.
Wei expressed confidence in TSMC's prospects for 2024, citing the company's technology leadership and diverse customer base as key drivers of growth. He emphasized that TSMC is well-positioned to achieve quarter-over-quarter growth throughout the year, with a reaffirmed expectation of low to mid-20 percent revenue growth in US dollar terms for the full year.
Highlighting TSMC's technology leadership, Wei underscored the company's ability to secure business opportunities and empower customers to succeed in their respective markets. He noted that TSMC plays a pivotal role in meeting the soaring demand for energy-efficient computing power driven by AI applications, with a significant number of AI innovators partnering with the company to address this demand.
In the 1Q24 breakdown of TSMC's revenue by application sector, high-performance computing, including AI processors, accounted for 46 percent of the total revenue, amounting to approximately US$18.33 billion. Smartphone revenue decreased to represent 38 percent, while IoT, Automotive, and digital communications equipment sectors accounted for 6 percent, 6 percent, and 2 percent, respectively.