On the 44th anniversary of its IPO, Apple (AAPL) has much to celebrate, with its stock seeing a steady 25% increase over the past year. This week, Apple released a significant software update integrating Siri with ChatGPT, enhancing its artificial intelligence (AI) capabilities. Their recent iOS 18.1 update introduced Apple Intelligence, featuring generative writing and email and notification summaries to improve productivity.
As Apple continues to focus on AI, its demand for chips will grow. Fortunately, one of its main semiconductor suppliers, Taiwan Semiconductor Manufacturing Company (TSMC), has shared promising news.
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Apple Chip Supplier’s Positive Production Outlook
Even before the AI boom sparked by ChatGPT in November 2022, Apple partnered with TSMC. In 2010, Apple gave TSMC a contract that helped it become a leading player in the semiconductor market. Now, TSMC is crucial for many Silicon Valley giants. Although based in Taiwan, TSMC is establishing a manufacturing presence in the U.S.
Recently, TSMC finished building a 3.5-million-square-foot facility, known as a ‘fab,’ in Phoenix, Arizona, which is the most advanced chip fab in the U.S. It is currently in the pilot phase, producing sample wafers for semiconductors. This development is advantageous for Apple, as it plans to be the largest customer of this new facility. CEO Tim Cook expressed excitement on social media about Apple soon using chips made in the U.S.
TSMC has ambitious plans for its U.S. plant, including investing $65 million to build two more fabs by 2030. Rick Cassidy, CEO of TSMC Arizona, mentioned that the company is nearly back on its original schedule, aiming for higher production capacity. This expansion is good news for Apple and other tech leaders like Nvidia and AMD, who rely on TSMC’s chips.
TSMC’s Opportunities in the Chip Market
TSMC’s importance to major tech companies has led to significant stock growth, with a 96% increase over the past year, surpassing Apple and other Magnificent 7 stocks like Tesla (TSLA) and Microsoft (MSFT). Alexander Wah, Founder of Prince Capital, noted TSMC’s unique pricing power due to its reliability and quality.
Wah believes TSMC’s stock performance will depend on meeting its targets and projections. He also highlights opportunities among smaller and mid-sized companies in the semiconductor market. Chris Versace of TheStreet Pro recently noted TSMC’s strong sales growth, with October and November revenues rising 31% year-over-year, easing concerns about AI, data center, or smartphone demand.
