Nvidia's performance supports the continued growth of Taiwan Semiconductor's AI.
Analysts... "Nvidia (NASDAQ: NVDA largest holdings.The strong performance and guidance, Taiwan Semiconductor (NYSE: TSM) mentioned that they will continue to benefit from the growth of artificial intelligence.
"This result emphasizes the robust structural AI demand with limited digestion period while adoption accelerates," noted Bank of America analyst Brad Lin in a client note. "The 1-year cycle of NVIDIA's datacenter GPU development particularly favors TSMC, supporting the growth of [average selling price] content. The continuous scaling of AI models strengthens TSMC's demand for cutting-edge nodes and industry leadership."
Lin, who has a buy rating on Taiwan Semiconductor, added that next year's "solid" gross margin outlook for NVIDIA reflects the strong value Taiwan Semiconductor provides to its customers. With NVIDIA continuing to accelerate its product development pace, this bodes well for Taiwan Semiconductor.
"The increasing pace of product launches enhances visibility into TSMC's [average selling price] growth and supply chain dynamics," Lin added. "We believe these developments, combined with the expanding AI-driven demand amidst challenging supply chain conditions, further strengthen TSMC's strategic position in the industry."
City analyst Mr. Chen (Chia Yi) expressed a similar view, stating that Taiwan Semiconductor aims to double its chip-on-wafer-substrate production capacity again by 2025, with Nvidia being the biggest contributor to the company's AI business.
"This result emphasizes the robust structural AI demand with limited digestion period while adoption accelerates," noted Bank of America analyst Brad Lin in a client note. "The 1-year cycle of NVIDIA's datacenter GPU development particularly favors TSMC, supporting the growth of [average selling price] content. The continuous scaling of AI models strengthens TSMC's demand for cutting-edge nodes and industry leadership."
Lin, who has a buy rating on Taiwan Semiconductor, added that next year's "solid" gross margin outlook for NVIDIA reflects the strong value Taiwan Semiconductor provides to its customers. With NVIDIA continuing to accelerate its product development pace, this bodes well for Taiwan Semiconductor.
"The increasing pace of product launches enhances visibility into TSMC's [average selling price] growth and supply chain dynamics," Lin added. "We believe these developments, combined with the expanding AI-driven demand amidst challenging supply chain conditions, further strengthen TSMC's strategic position in the industry."
City analyst Mr. Chen (Chia Yi) expressed a similar view, stating that Taiwan Semiconductor aims to double its chip-on-wafer-substrate production capacity again by 2025, with Nvidia being the biggest contributor to the company's AI business.
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