Taiwan Semiconductor Manufacturing Co. (TSMC) reported record-breaking results for the fourth quarter of 2024, with both revenue and profit surpassing analyst expectations, fueled by the growing demand for advanced chips, particularly in artificial intelligence (AI) applications.
The company’s net revenue for the December quarter reached NT$868.46 billion (approximately $26.36 billion), marking a 38.8% increase from the same period last year. Net income surged 57.0%, hitting a record NT$374.68 billion. These results exceeded the consensus estimates, which had anticipated revenue of NT$850.08 billion and net income of NT$366.61 billion.
As the world’s largest contract chipmaker, TSMC continues to benefit from the AI boom. Its high-performance computing (HPC) division, which includes AI and 5G technologies, contributed 53% of the company’s revenue for the quarter. This segment saw a 19% increase in revenue from the previous quarter, driven by strong demand for chips used by major clients such as Nvidia and Apple.
“The surging demand for AI chips has exceeded expectations in Q4,” said Brady Wang, Associate Director at Counterpoint Research.
Wang highlighted that revenue was also supported by the popularity of advanced chips in Apple’s latest iPhone 16 models.
For the full year of 2024, TSMC reported record annual revenue of NT$2.9 trillion, surpassing its previous milestones since going public in 1994. TSMC’s AI-related business continues to grow rapidly, with revenue from AI accelerator products accounting for a significant portion of the company’s total income. The company projects that its AI accelerator revenue will double in 2025, maintaining its strong growth trajectory.
Despite its impressive growth, TSMC faces challenges, including the impact of US trade restrictions on semiconductor shipments to China. These restrictions have added uncertainty to the global semiconductor market. However, TSMC remains optimistic, with analysts predicting another strong year in 2025, driven by AI demand. The company’s shares saw an 81% increase in 2024, reflecting investor confidence in its continued success.
Looking ahead, TSMC plans to increase its capital expenditure to between $38 billion and $40 billion in 2025, up more than 30% from the previous year. This investment will support the expansion of its production capacity, including the construction of new semiconductor fabs in the US, Japan, and Germany, in response to global demand for more diversified chip supply chains.
CNBC, Reuters, and the Financial Times contributed to this report.
