Josh White Sharecast News
16 Jan, 2025 11:10

AI demand drives record-breaking quarter for TSMC

dl tsmc taiwan semiconductor manufacturing corporation chips chipmaker logo building generic pd
TSMCSharecast / public domain image

Taiwan Semiconductor Manufacturing Company (TSMC) reported record-breaking fourth-quarter financial results on Thursday, fueled by surging demand for AI chips.

The world's largest contract chipmaker logged a 57% year-on-year increase in net income to TWD 374.68bn (£9.32bn), with revenue climbing 39% to TWD 868.46bn.

Both figures exceeded analyst expectations.

TSMC said it anticipated continued robust growth in 2025, projecting first-quarter revenue between $25bn and $25.8bn, up to 6% above market forecasts.

For the year, the company expected revenue growth in the mid-20% range, with capital spend of between $38bn and $42bn, representing a potential 41% increase from 2024.

The outlook reflected strong demand for high-performance computing (HPC) chips, which accounted for 53% of TSMC’s revenue in the fourth quarter.

“Our business in the fourth quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies,” said senior vice-president and chief financial officer Wendell Huang.

“Moving into first quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand.”

TSMC has been a major beneficiary of the AI revolution, driven by demand from clients like Nvidia and Apple.

Revenue from AI-related products more than tripled in 2024, and was expected to double again in 2025, according to TSMC executives.

However, uncertainties remained, including US export controls on AI chip technology to China and potential policy shifts under the incoming Donald Trump administration in Washington.

Geopolitical factors continued to influence TSMC’s strategy.

While the company said it planned to maintain its most advanced chip production in Taiwan, it was expanding globally with new facilities under construction in the US, Germany and Japan.

Its Arizona plant, a key part of US efforts to bolster domestic chip production, is slated to house advanced technologies, though no specific timeline has been disclosed.

At the close in Taipei on Thursday, shares in Taiwan Semiconductor Manufacturing Company were up 3.76% at TWD 1,105.

Reporting by Josh White for Sharecast.com.

contador