TSMC Surpasses Sales Estimates Amid AI Surge

The logo for Taiwan Semiconductor Manufacturing Company is displayed prominently on a screen at the New York Stock Exchange.

Taiwan Semiconductor Manufacturing Co. (TSMC), recognized as the largest chip manufacturer in the world, has reported impressive fourth-quarter revenue results that surpassed analyst expectations, driven largely by the ongoing boom in artificial intelligence (AI).

In the December quarter, TSMC achieved a revenue of 868.5 billion New Taiwan dollars (approximately $26.3 billion), marking a significant increase of 38.8% compared to the same period last year. This figure exceeded the consensus estimates provided by Refinitiv, which projected revenue at 850.1 billion New Taiwan dollars.

For the year 2024, TSMC recorded a total revenue of 2.9 trillion New Taiwan dollars, representing its highest annual sales since the company went public in 1994. This accomplishment solidifies TSMC's position as a vital player in the semiconductor industry, manufacturing chips for major global companies including Apple and Nvidia.

TSMC's standing as the most advanced chipmaker in the world is attributed to its capabilities in producing cutting-edge semiconductors. The strong demand for AI chips, particularly those from Nvidia, alongside advancements in smartphone semiconductor technology, has greatly contributed to the company’s success. Brady Wang, an associate director at Counterpoint Research, emphasized that TSMC has seen substantial benefits from the heightened demand for AI technology.

According to Wang, the capacity utilization rates for TSMC’s most sophisticated chips, including the 3 nanometer and 5 nanometer processes, have consistently exceeded 100%. This high utilization indicates that the company is maximally leveraging its manufacturing capabilities to meet the surging demand for AI graphics processing units (GPUs) and other AI-related chips.

In addition to its strong quarterly performance, TSMC's stock has seen impressive growth, with shares listed in Taiwan rising by 88% over the past year. This upward trend is encouraging investors, suggesting that the demand for AI chips and services may continue to thrive into 2025.

Overall, TSMC's latest sales figures reflect the ongoing strength of the semiconductor market, significantly influenced by advances in artificial intelligence and technology.

TSMC, AI, semiconductors