Taiwan Semiconductor Manufacturing Company’s fourth-quarter sales and profit exceeded forecasts as the demand for cutting-edge semiconductors used in artificial intelligence applications continues to rise.
TakeAway Points:
- Taiwan Semiconductor Manufacturing Co.’s December quarter profit and revenue above analyst projections as the business reaps the benefits of the AI boom.
- TSMC’s net income increased 57.0% to a record NT$374.68 billion in the December quarter, while its sales increased 38.8% to NT$868.46 billion from the same period last year.
- However, TSMC may face some headwinds in 2025 from U.S. restrictions on advanced semiconductor shipments to China and uncertainty surrounding the trade policy of President-elect Donald Trump
TSMC’s profit increase on AI chip demand
Due to the growing demand for advanced semiconductors utilised in artificial intelligence applications, Taiwan Semiconductor Manufacturing Company’s fourth-quarter revenue and earnings surpassed projections.
TSMC’s fourth-quarter results versus LSEG consensus estimates:
Net revenue: 868.46 billion New Taiwan dollars ($26.36 billion), vs. NT$850.08 billion expected, while Net income: NT$374.68 billion, vs. NT$366.61 billion expected
TSMC profit rose 57% from a year earlier to a record high, while revenue jumped 38.8%. The firm had forecast fourth-quarter revenue between $26.1 billion and $26.9 billion.
As the world’s largest contract chip manufacturer, TSMC produces advanced processors for clients such as Nvidia and Apple and has benefitted from the megatrend in favour of AI.
TSMC’s high-performance computing division, which encompasses artificial intelligence and 5G applications, drove sales in the fourth quarter, contributing 53% of revenue. That HPC revenue was up 19% from the previous quarter.
“The surging demand for AI chips has exceeded expectations in Q4,” Brady Wang, associate director at Counterpoint Research, said, adding that revenue was also bolstered by demand for the advanced chips in Apple’s latest iPhone 16 model.
The Taiwan-based company first released its December revenue last week, bringing its annual total to NT$ 2.9 trillion—a record-breaking year in sales since the company went public in 1994.
“We observed robust AI-related demand from our customers throughout 2024,” TSMC Chairman and CEO C.C. Wei said in an earnings call on Thursday, adding that revenue from AI accelerator products accounted for “close to a mid-teens percentage” of total revenue in 2024.
“Even after more than tripling in 2024, we forecast our revenue from AI accelerators to double in 2025 as a strong surge in AI-related demand continues as a key enabler of AI applications,” Wei added.
Chip export restriction
However, TSMC may face some headwinds in 2025 from U.S. restrictions on advanced semiconductor shipments to China and uncertainty surrounding the trade policy of President-elect Donald Trump.
Wei said the company will not attend Trump’s inauguration as its philosophy is to keep a low profile, Reuters reported.
Trump, who will assume office next week, has threatened to impose broad tariffs on imports and has previously accused Taiwan of “stealing” the U.S. chip business.
Still, Counterpoint’s Wang forecasts 2025 to be another strong year for TSMC, with significant revenue growth fueled by strong and expanding demand for AI applications, both in diversity and volume.
Taiwan-listed shares of TSMC gained 81% in 2024 and were trading 3.75% higher on Thursday.
Stocks of European semiconductor companies trading on the Euronext Amsterdam Stock Exchange rose Thursday, with ASML up 3.5%, ASM International gaining 3.75% and Besi rising 5.1%.
