Zinger Key Points
- TSM ends collaboration with PowerAIR after finding its chip in Huawei's AI processor, citing US sanctions compliance.
- TSM stock surged 105% in 12 months, driven by AI chip production for Nvidia and Apple's smartphone chips.
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Semiconductor chipmaker Taiwan Semiconductor Manufacturing Co TSM ended collaboration with Singapore’s PowerAIR after discovering a Taiwan Semiconductor chip in a Huawei Technologies artificial intelligence processor, SCMP reports.
In 2024, the Taiwanese contract chipmaker suspended shipments to China’s chip designing firm Sophgo after a chip it ordered from the Taiwanese chipmaker matched with one on Huawei’s Ascend 910B multi-chip system.
Washington imposed sanctions on Chinese smartphone giant Huawei in 2020, citing national security threats.
The update coincides with reports indicating Nvidia and other chipmakers are susceptible to potential U.S. AI chip sanctions to China. Washington’s new curbs could restrict Nvidia’s AI chip shipments, with three-tier export rules favoring allies like Taiwan and barring Tier 3 nations like China.
Taiwan Semiconductor stock surged over 105% in the last 12 months, gaining prominence by manufacturing AI chips for Nvidia Corp GPUs and chips for Apple Inc smartphones.
Taiwan Semiconductor reported consolidated revenue of
2.89 trillion New Taiwan dollars between January and December 2024 (up by 33.9% year-on-year). It reported a consolidated revenue of 2.03 trillion New Taiwan dollars between January and September 2024. Therefore, it implies that the chipmaker reported a consolidated revenue of 868.46 billion New Taiwan dollars ($26.3 billion versus a consensus of $26.2 billion) for the December quarter versus $19.62 billion a year ago.
The company expects fourth-quarter revenue of $26.1 billion – $26.9 billion.
Taiwan Semiconductor considered China the most significant revenue source after the U.S., as per the SCMP report. The chipmaker expected its China sales to grow by 26% in 2024 to $10.4 billion, accounting for 12% of its total revenue of $88.3 billion, SCMP cites Visible Alpha.
Investors can gain exposure to stocks of companies that manufacture semiconductors through the Invesco Semiconductors ETF PSI and ProShares UltraShort Semiconductors SSG.
Price Action: TSM stock is up 1.34% at $209.89 premarket at last check Friday.
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