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The backstory: The tech sector has been in a years-long slump, with things like geopolitical tensions, wars, inflation, high interest rates, economic uncertainty, fears of a recession and declining consumer demand wearing on the industry. This has especially been noticeable in areas like computers and smartphones. But, after seven quarters in a row of decline, some data is suggesting that 2024 might bring a recovery. According to Canalys’ latest research, smartphone shipments around the world grew 8% year on year in the fourth quarter last year. On top of that, the firm estimates that the world’s computer market will grow by 8% this year, especially boosted by the rise of artificial intelligence (AI).
More recently: But, there are still some uncertainties looming. For example, tech giant Samsung just reported its sixth successive quarter of declining operating profit. And Apple, although just recently topping Samsung for the first time since 2010 as the world’s top smartphone brand, is still forecast to see lukewarm demand this year in China, its largest market, according to Jeffries.
The development: It seems like eight is the magic number for this year. Taiwan Semiconductor Manufacturing Co. (TMSC), the world’s largest contract chip manufacturer, has predicted major growth in the smartphone and computer market this year. The company, the main semiconductor supplier to Apple and Nvidia has given itself the green light for capital spending this year, forecasting revenue growth of at least 8% to US$18.8 billion in the quarter ending in March. TMSC has budgeted for a capital expenditure of US$28 billion to US$32 billion, compared to about US$30 billion in 2023. It’s also moving ahead with its plans for chipmaking plants in Japan, Arizona and Germany. TSMC shares on Wall Street rose over 8% in the early morning on Thursday, its biggest intraday jump since May.
“Our business has bottomed out on a year-over-year basis, and we expect 2024 to be a healthy growth year for TSMC,” said CEO of TSMC, C.C. Wei.
“TSMC’s ambitious 2024 revenue target, set at low-to-mid-20% growth, underscores its confidence in retaining high customer acceptance for its advanced N3 and N5 nodes, despite rising competition from Samsung and Intel and a slow recovery in smartphone and PC markets. The target rate surpasses both consensus estimates and the 13.1% global semiconductor sales growth forecast by the SIA,” Bloomberg Intelligence analyst Charles Shum said in a research note.