Investing.com -- Taiwan Semiconductor Manufacturing Company (TW:2330) will be a "beneficiary" of Apple (NASDAQ:AAPL)'s plans to enhance to its artificial intelligence capabilities, according to analysts at Bank of America Securities.
In a note to clients on Tuesday, the analysts said that the world's leading contract chipmaker will see increased demand from Apple for its semiconductors, many of which are used in AI applications. Apple is TSMC's biggest client, accounting for roughly a fourth of its revenue.
"We believe the semi[conductor] demand upside from Apple can get bigger with its widening AI service, from a relatively low base. TSMC is Apple’s supplier for the A- and M-series semiconductors and is well poised to benefit from multi-year growth," the BofA analysts said.
They reiterated their "Buy" rating of TSMC's stock and lifted their estimates for the firm's 2024 to 2026 earnings by 1% to 3%.
Earlier this week, Apple announced a partnership with OpenAI that will see the iPhone-maker fold ChatGPT into its products. The agreement, which was revealed at Apple's annual developers conference on Monday, comes as the tech giant looks to enhance its AI offerings following an intensifying surge in enthusiasm around the nascent technology.
Prior to the event investors were speculating if Apple would roll out new generative AI features, particularly as it looks to address a growing feeling that it was lagging behind its Big Tech rivals like e-commerce group Amazon (NASDAQ:AMZN) and Google-owner Alphabet (NASDAQ:GOOGL). Chief Executive Tim Cook lauded the new "Apple Intelligence" system, which aims to use AI to improve its Siri voice assistant and deliver more personalized offerings, as the company's "next big step."