0422 GMT - DeepSeek will likely have minimal impact on TSMC's profitability, Morningstar equity analyst Phelix Lee writes in a note. TSMC's share price may see short-term volatility as companies leverage this new AI model, which runs on a fraction of normal computing power, Lee says. However, TSMC will continue to benefit from durable AI spending in the long run. As TSMC's existing supply remains well short of demand, its factories are expected to remain fully utilized even if companies slightly lower their AI investments, Lee says. The availability of cheaper AI models may encourage companies to increase their AI spending which could in turn increase profit margins of companies like TSMC, he reckons.(kimberley.kao@wsj.com)
(END) Dow Jones Newswires
January 27, 2025 23:22 ET (04:22 GMT)
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