Taiwan Semiconductor Manufacturing Company (TSMC) has delivered an impressive financial performance in the December quarter, surpassing analysts’ expectations as it capitalizes on the burgeoning demand for artificial intelligence (AI) technology. The fourth-quarter revenue reached a staggering 868.5 billion New Taiwan dollars (approximately $26.3 billion), representing a remarkable year-on-year increase of 38.8%. This figure not only outstripped the consensus estimate of 850.1 billion New Taiwan dollars set by Refinitiv but also marks a robust testament to TSMC’s role as a key player in the semiconductor market. Furthermore, for the entirety of 2024, TSMC reported an annual revenue of 2.9 trillion New Taiwan dollars, marking its highest sales since its public listing in 1994.
The seismic shift towards AI has positioned TSMC at the forefront of the semiconductor industry. As the largest chip manufacturer globally, TSMC plays a crucial role in producing semiconductors for tech giants such as Apple and Nvidia. The company’s advanced manufacturing capabilities enable it to create cutting-edge chips, thus enhancing its competitiveness in an industry characterized by rapid technological advancements. According to Brady Wang, a research associate at Counterpoint Research, TSMC’s “capacity utilization” levels for its 3nm and 5nm chip processes have consistently exceeded the 100% threshold. This high utilization rate underscores the surging demand for AI graphics processing units (GPUs), with Nvidia’s products being particularly influential in this domain.
The remarkable sales growth has had a positive ripple effect on TSMC’s stock performance, with shares soaring by 88% over the past year. This surge not only reflects TSMC’s operational success but also enhances investor confidence in the company’s future prospects. TSMC’s strong results could signal continued demand for AI chips and related services well into 2025, fostering optimism among investors. The increasing urgency for advanced computing resources to support AI infrastructures can further solidify TSMC’s market position.
The ripple effects of TSMC’s success can also be seen within the larger technology ecosystem. Foxconn, known for assembling Apple devices, recently reported its highest-ever revenue for the fourth quarter, attributed to robust demand for AI server components. Moreover, Microsoft’s ambitious plans to invest $80 billion in data centers capable of supporting AI workloads underlines the enormity of this sector’s growth. All these trends indicate a significant pivot in the technology landscape, pivoting toward AI-driven innovations.
TSMC’s financial performance not only illustrates its operational strength but also emphasizes the broader trends propelling the tech industry. As AI continues to reshape consumer and enterprise computing, TSMC’s advancements in semiconductor manufacturing place it at the heart of this transformative era, potentially leading to further growth and innovation in the years to come.