The latest robust earnings update from Nvidia (NVDA, Financial), bolsters optimism for TSMC (TSM, Financial), with analysts predicting the company will continue to ride the growth of the booming field of artificial intelligence. Analysts such as Brad Lin of Bank of America said that the demand for AI is persistent due to Nvidia's revenue predictability. Lin pointed out that Nvidia's steady product release cycle for its data center GPUs puts TSMC in a good place, and growth in ASPs further cement them as industry leaders in semiconductor technology.
Citi analyst Chia Yi Chen also concluded that TSMC's chip on a wafer substrate output will double by 2025, with Nvidia's contribution, especially in AI weeding. As the demand for higher-level AI models increases, we are optimistic that TSMC will gain from the higher demand for higher-end production capability.
Together with the growth in demand for AI technologies, the technological advantage of TSMC allows the company to expect further development in the coming years. Both analysts supported the view on good net synergies between Nvidia and TSMC, the fast pace of product turnover and growth of consumer AI models, and improved competitive positioning of TSMC in the semiconductor sector
