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TSMC’s Q4 Revenue Exceeds Expectations, Boosted by AI Demand

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, reported a strong performance in the fourth quarter of 2024, with revenue significantly surpassing market forecasts, driven by robust demand for artificial intelligence (AI) products. TSMC’s customers, including major tech firms like Apple and Nvidia, have been key players in the AI revolution, which has helped offset the slowdown in chip demand for consumer electronics like tablets following the pandemic.

For the October-December period, TSMC posted revenue of T$868.42 billion ($26.36 billion), a 34.4% year-on-year increase, exceeding the expected T$853.57 billion ($25.90 billion) according to analysts surveyed by LSEG SmartEstimate. This marks a significant jump from the $19.62 billion revenue recorded during the same period in 2023.

TSMC had previously forecasted fourth-quarter revenue to fall between $26.1 billion and $26.9 billion, which it successfully met within its guidance range. For December alone, the company reported a 57.8% year-on-year revenue increase, reaching T$278.16 billion.

This positive performance reflects the growing demand for semiconductors used in AI applications, with other Taiwanese firms, such as Foxconn, also reporting strong earnings in the fourth quarter due to the AI boom. TSMC is scheduled to announce its full fourth-quarter earnings on January 16, where it will provide an updated outlook for the current quarter and the full year.

The company’s stock rose 81% in 2024, far outpacing the broader market’s 28.5% gain, though it closed flat on Friday ahead of the revenue release.

 

TSMC Begins Production of Advanced 4-Nanometer Chips in Arizona

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Taiwan Semiconductor Manufacturing Co (TSMC) has officially started producing advanced four-nanometer chips at its Arizona facility, marking a significant milestone in the U.S. semiconductor industry. U.S. Commerce Secretary Gina Raimondo revealed the news, calling it a historic achievement for the United States, which now manufactures cutting-edge chips on American soil for the first time.

This breakthrough follows TSMC’s $6.6 billion grant from the U.S. Department of Commerce to bolster semiconductor production in Phoenix, Arizona. Raimondo emphasized the importance of this development, noting that the chips produced are on par with Taiwan’s high-quality standards in both yield and performance. She highlighted the achievement as one that many doubted could happen, marking a critical moment in the U.S. push for domestic semiconductor production.

TSMC, the world’s leading contract chipmaker and a key supplier for tech giants like Apple and Nvidia, has yet to publicly comment on the start of production. However, this move comes after TSMC’s agreement in April to significantly expand its Arizona operations. The company plans to invest an additional $40 billion, bringing its total investment to $65 billion, and will build a third fabrication plant by 2030.

This production milestone is part of the broader $52.7 billion U.S. initiative to boost semiconductor manufacturing and research within the country. Raimondo revealed that convincing TSMC to expand its U.S. plans was no easy feat, and significant negotiations were required.

Looking ahead, TSMC intends to produce even more advanced chips, including two-nanometer technology, at its second Arizona fab, scheduled for 2028. By then, the company plans to use its most advanced “A16” chip manufacturing technology in the U.S. as part of this expansion. The U.S. government has also supported TSMC’s efforts with up to $5 billion in low-interest loans.

Raimondo’s goal is for the U.S. to produce 20% of the world’s leading-edge logic chips by 2030, a dramatic increase from its current share of zero. TSMC expects to begin high-volume production in its first U.S. fab by the first half of 2025.

Additionally, in a related development, the Commerce Department awarded $407 million to support Amkor Technology’s $2 billion advanced semiconductor packaging facility in Arizona. This facility, set to be the largest of its kind in the U.S., will focus on packaging and testing chips for industries such as autonomous vehicles, 5G/6G, and data centers, with Apple expected to be its first major customer.

 

TSMC Fourth-Quarter Profit Expected to Jump 58% Due to AI Chip Demand Surge

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading producer of advanced chips for artificial intelligence (AI) applications, is set to report a 58% increase in fourth-quarter profit, driven by strong demand in the AI sector. The company, which counts Apple and Nvidia among its clients, is benefiting from the AI megatrend but faces challenges such as U.S. government technology restrictions on China and potential tariffs under President-elect Donald Trump’s administration.

Analysts estimate that TSMC will post a net profit of T$377.95 billion ($11.41 billion) for the quarter ending December 31, compared to T$238.7 billion in the same period the previous year. This projection follows TSMC’s recent revenue report, which exceeded market expectations. The company will release its revenue outlook in U.S. dollars during its quarterly earnings call on Thursday.

Arete Research analyst Brett Simpson believes TSMC’s growth in 2025 will continue to be driven by AI customers. He is optimistic that TSMC can establish a strong relationship with the incoming U.S. administration, especially given its $65 billion investment in three plants in Arizona. TSMC’s overseas expansion, however, is not expected to diminish its Taiwanese manufacturing base.

Fubon Financial’s Edward Chen noted that the company’s progress in Arizona, including chip yield rates, would be critical for its future performance. He also highlighted the uncertainty regarding how tariffs from the Trump administration may impact demand.

TSMC is expected to provide updates on its current quarter and full-year outlook during its earnings call, including capital expenditure plans. The company has already projected capital expenditure for 2024 to be slightly over $30 billion and indicated that 2025’s capital spending could surpass 2024 levels.

The AI boom has driven up TSMC’s stock, with the company’s shares soaring 81% last year, significantly outperforming the broader market’s 28.5% gain.