Taiwan Semiconductor April Revenue Jumps 60% On-year

Taiwanese chip giant TSMC reported a 60% increase in April revenue, driven by a surge in demand for advanced semiconductors used in AI hardware. The Taiwan Semiconductor Manufacturing Company controls over half the world's chip output and supplies them for various products, including Apple's iPhones and Nvidia's artificial intelligence hardware. The company's revenue for April was approximately NT$236.02 billion (US$7.2 billion), an increase of 596.6% from April 2023. The company expects a 27.6% rise in Q1 revenue.

The success of OpenAI's ChatGPT has sparked an AI gold rush, with demand for cutting-edge chips needed to train and run AI services worldwide. TSMC dominates the global chip industry, with most of its fabrication plants located in Taiwan, a self-ruled island claimed by China. Concerned governments have lobbied TSMC to move production away from Taiwan, and the US has made a significant push to overhaul the semiconductor industry on American soil.

US Commerce Secretary Gina Raimondo stated that an invasion of Taiwan by China and a seizure of TSMC would be "absolutely devastating" to the American economy. Currently, the US buys 92% of its leading edge chips from TSMC in Taiwan.

TSMC plans to open a third factory in the US, raising its total investment to US$65 billion. However, the company faces obstacles due to a lack of human resources and specialized skills required for making chips. Additionally, TSMC is planning another facility in Kumamoto for more advanced chips.

Technical Outlook
Taiwan Semiconductor ( TSM ) stock is up 5% on Friday's Market trading, with a Relative Strength Index (RSI) of 66 which is slightly overbought. A move further above the 38 Fibonacci Level will accentuate the bullish trend of $TSM.