Taiwan Semiconductor Manufacturing's second-quarter earnings provided another look at how artificial intelligence has transformed the semiconductor industry.
The company makes chips for just about everyone: Nvidia, Apple, Qualcomm, Advanced Micro Devices, Broadcom, Marvell and many more. Even Intel, which owns its own manufacturing, produces some of its silicon wafers at Taiwan Semi factories.
The composition of the chip maker's sales can tell us a lot about trends in the semiconductor business. In the second quarter, it's showing how much AI is taking over.
Overall, second-quarter sales were up 241% from the same quarter in 2021, but there was a dynamic shift underneath the surface. High-performance computing--which includes AI and data center networking chips--saw sales rise nearly 500% in that period, going from 39% of sales in the second quarter of 2021 to two-thirds this year.
In 2021, sales to smartphone customers were a plurality of second-quarter sales at 42%. But this source of revenue has only risen by about 80% in five years, and was only 22% of Taiwan Semi sales this year.
The one smaller category that has kept pace is automotive chips from the likes of Nvidia and Qualcomm. They've remained 4% of second-quarter sales over the five years.
Other small categories have not fared as well. Chips for wearables, smart home and industrial internet-of-things went from 8% of second-quarter sales to 5%. Silicon destined for smart TVs, set-top boxes and cameras, which the company calls DCE, went from 4% of sales in 2021 to only 1%.
