Nvidia’s latest robust earnings update (NVDA, Financial), reinforces optimism for TSMC (TSM, Financial), with analysts predicting that the company will continue to benefit from growth in the burgeoning field of artificial intelligence. Analysts such as Bank of America’s Brad Lin have said that demand for AI is persistent due to the predictability of Nvidia’s revenue. Lin pointed out that Nvidia’s steady product release cycle for its data center GPUs puts TSMC in a good position, and that ASP growth further cements them as an industry leader in semi-automatic technology. drivers.
Citi analyst Chia Yi Chen also concluded that TSMC’s wafer substrate chip production will double by 2025, with Nvidia contributing, particularly in weeding out AI. As demand for higher-level AI models increases, we are optimistic that TSMC will benefit from the increased demand for high-end production capabilities.
Along with the growth in demand for AI technologies, TSMC’s technological advantage makes the company look forward to further development in the coming years. Both analysts supported the view on good net synergies between Nvidia and TSMC, the rapid pace of product revenue and growth of consumer AI models, as well as the improvement of TSMC’s competitive positioning in the semiconductor sector.
This article first appeared on GuruFocus.