Strong ASML, TSMC forecasts signal AI spending boom is intact
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ASML and TSMC's strong forecasts indicate continued heavy spending by US cloud-computing giants on advanced AI chips. The demand is expected to outstrip supply due to capacity constraints, driving companies to sign long-term agreements.
ASML and TSMC have issued strong forecasts, pointing to continued heavy spending by US cloud-computing giants on advanced AI chips. The demand is driven by companies like Microsoft, Meta, and Amazon, which are expected to spend over $600 billion on data centers this year. TSMC and ASML have raised their annual revenue forecasts and are increasing capital spending to meet AI chip demand. The industry's reliance on a few suppliers means chipmakers face capacity constraints, leading to long-term agreements to secure capacity commitments. TSMC CEO C.C. Wei stated that capacity is very tight, but they are working hard to meet customers' demand. ASML CEO Christophe Fouquet noted that demand is set to outstrip supply for the foreseeable future.
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