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Intel and telcos left in virtual RAN limbo by rise of AI RAN
A multitude of general-purpose and specialist silicon options now confronts the world's 5G community, while Intel's future in telecom remains uncertain.
Chipmaking giant TSMC maintains full-year forecast but warns of geopolitical and macroeconomic headwinds.
TSMC, the world's biggest contract chipmaker, has ridden the AI chip boom back to growth, reporting a 9% growth in first quarter earnings.
On Thursday, the Taiwanese firm announced quarterly revenue of $592.64 billion New Taiwan dollars (US$18.3 billion), up 16.5% year-on-year, and net income of NT$225.5 billion ($7 billion). This follows three quarters of revenue decline as the chip sector worked its way through the post-covid inventory glut last year.
The company said its biggest segments were HPC – covering AI, servers and PCs – and smartphones, accounting for 82% of sales between them. HPC grew 3% over the December quarter, with smartphone sales down 16%.
TSMC CEO C.C. Wei said the rebound in the smartphone market had been "a gradual, not a steep recovery," while PC and traditional server growth had also been slow.
"However, AI-related data center demand is very, very strong," he told an earnings call. He said the shift in hyperscaler spending from traditional server to AI server was also favorable for TSMC.
"We are able to capture most of the semiconductor content in the AI service area."
Overcapacity
Wei admitted to "concern" about overcapacity in mature chip technologies – a reference to heavy investment in China in its efforts to create a self-reliant chip sector.
He said TSMC's strategy was to develop specialized solutions for its major customers to create long-term value.
"So, we have been less exposed to this possible overcapacity environment, and we believe that our utilization and profitability [in our] mature nodes can be well-protected."
Wei said macro-economic and geopolitical uncertainty had the potential to weigh on consumer sentiment and market demand in 2024.
"We thus expect the overall semiconductor market excluding memory to experience a more mild and gradual recovery in 2024."
TSMC’s forecast was for the 2024 semiconductor market (excluding memory) to increase by approximately 10% year over year.
The company maintained its guidance of full-year revenue growth of "low to mid 20 percent." It expects second-quarter revenue between $19.6 billion and $20.4 billion and gross margin between 51% and 53%.
TSMC's stock on the Taipei exchange closed unchanged. The stock has risen 36% so far this year.
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