Nvidia orders expected to be delivered in July, according to report
U.S. shares of Taiwan Semiconductor Manufacturing Co. outpaced the broader chip sector Monday following a report that increased AI-related orders from Nvidia Corp. have allowed the third-party fabricator to increase use of its capacity significantly.
On Monday, Taiwan's Economic Daily News reported that TSMC (2330.TW) was now using 70% to 80% of its 5-nanometer transistor-making capacity because of Nvidia $(NVDA)$ orders, up from previous usage levels in the more-than 50% range.
In chip parlance, nanometers, or nm, refers to the size of the transistors that are etched onto a silicon wafer to make a computer chip, with the general rule being that smaller transistors are faster and more efficient in using power.
TSMC has the capacity to make up to 130,000 5-nm wafers a month, and is currently running a production volume of about 90,000 to 100,000 wafers a month because of the additional Nvidia orders, which will be delivered in July, according to the report.
Nvidia is expected to cash in big on the artificial-intelligence surge via hardware and software sales this year.
American depositary receipts of TSMC rose 4.1% on Monday to close at $107.06, while the PHLX Semiconductor Index finished up 3.3%, compared with a 0.9% rise by the S&P 500 index, and a 1.5% gain on the tech-heavy Nasdaq Composite Index.