Strong AI Investments by Meta and Microsoft Boost TSMC's Chip Demand Outlook

May 02, 2025

Morgan Stanley's report highlights that robust AI capital expenditures from Meta and Microsoft should alleviate concerns about TSMC's (TSM, Financial) chip demand. Meta has increased its annual capital expenditure to a range of $64 billion to $72 billion, while Microsoft indicates sustained strong AI demand. Morgan Stanley projects that the contribution of cloud semiconductor business to TSMC's revenue will rise from 13% in 2024 to 25% in 2025. Analysts also predict that, including network chips and CPUs for AI servers, AI's contribution to TSMC's revenue should exceed 30% starting in 2025.

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