TSMC beat sales estimates as AI chip growth continues

Taiwan Semiconductor Manufacturing Co. The company posted December quarter revenue that beat analysts’ estimates as it continued to get a boost from the artificial intelligence boom.

The world’s largest chipmaker reported revenue of 868.5 billion New Taiwan dollars ($26.3 billion) in the fourth quarter, up 38.8% year-over-year, according to CNBC estimates.

That beat Refinitiv’s consensus estimate of NT$850.1 billion.

For 2024, TSMC’s revenue is 2.9 trillion New Taiwan Dollars, the highest annual sales since it went public in 1994.

TSMC manufactures semiconductors for some of the world’s largest companies, including apple and Nvidia.

TSMC is considered to be the world’s most advanced chip maker, given its ability to produce advanced semiconductors. The company has been helped by strong demand for AI chips, particularly from Nvidia, as well as ever-improving smartphone semiconductors.

“TSMC has benefited significantly from the strong demand for artificial intelligence,” Brady Wang, deputy director of Counterpoint Research, told CNBC.

Wang said “capacity utilization” for TSMC’s 3-nanometer and 5-nanometer processes — the most advanced chips — “consistently exceeded 100%.”

AI graphics processing units (GPUs) and other artificial intelligence chips developed by Nvidia are driving this demand, Wang said.

TSMC’s Taiwan-listed shares are up 88% in the past 12 months.

TSMC’s latest sales figures may also give investors hope that demand for AI chips and services may continue into 2025.

FoxconnThe person who assembles the “iPhones” of the “Apple” company has released information about this the highest revenue of the fourth quarter this week as AI servers gained strong demand.

Meanwhile, Microsoft said this month It plans to spend 80 billion dollars on building data centers capable of handling AI workloads by June this fiscal year.

CNBC’s Jordan Novet contributed to this report.