(March 10): Taiwan Semiconductor Manufacturing Co’s sales growth is running behind lofty expectations in 2026, suggesting sky-rocketing memory prices may be hurting even high-end smartphone and PC demand.
Revenue in January and February at Apple Inc’s go-to chipmaker rose 30%, a pace that trails the 33% increase analysts project for the current quarter. That’s as TSMC shifts capacity to make more of the high-end Nvidia Corp and Advanced Micro Devices Inc chips that go into data centres.
Taiwan’s largest company, which makes the vast majority of the world’s most advanced semiconductors, is a primary beneficiary of a global race to build artificial intelligence (AI) infrastructure. But insatiable need for the advanced memory those computing hubs require is draining the production and supply of conventional memory chips. Prices for those lower-end semiconductors — which are essential in virtually all modern devices — have soared multiple-fold in past months, raising the prices of gadgets.
“The softness is unlikely to be cooling AI-chip demand, and probably reflects weaker smartphone and PC demand, with higher memory prices pressuring shipments,” Bloomberg Intelligence’s Charles Shum wrote. TSMC’s quarterly revenue may only reach the low end of its guidance, he added.
Companies are struggling to fulfil investors’ sky-high hopes around artificial intelligence, after Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp earmarked US$650 billion ($826.9 billion) of AI spending this year. Nvidia’s shares are down 2% from the start of the year despite delivering an outlook that beat estimates, on top of a 73% jump in quarterly revenue.
Building advanced data centres can cost tens of billions of dollars, requiring coordination with electrical grid operators, materials and components suppliers and debt providers. Oracle Corp and OpenAI have scrapped plans to expand a flagship data centre in Texas after negotiations dragged over financing and OpenAI’s changing needs, Bloomberg News reported last week.
See also: Apple now makes about 25% of iPhones in India after China pivot
A stronger Taiwanese dollar may be dragging on TSMC’s sales, Bank of China International analyst Szeho Ng said. Looking ahead, the company’s plan to exit mature chip production should free up engineering resources and cleanroom space for higher-value products, he added.
“We would pay more attention to its 2H sales performance instead,” he wrote. That’s when the latest advanced chips from Nvidia, AMD, Google and Amazon go into higher volume production.
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