TSMC beats sales estimates as AI chip boost continues

Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that beat analyst estimates as the company continues to get a boost from the AI ​​boom.

The world’s largest chip maker reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year. the year

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

By 2024, TSMC’s revenue will be 2.9 trillion New Taiwan Dollars, its highest annual sales since going public in 1994.

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

TSMC is seen as the most advanced chipmaker in the world, given its ability to manufacture state-of-the-art semiconductors. The company has been helped by strong demand for AI chips, particularly from Nvidia, as well as increasingly advanced smartphone semiconductors.

“TSMC benefited significantly from strong AI demand,” Brady Wang, associate director of Counterpoint Research told CNBC.

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

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

Taiwan-listed TSMC shares have risen 88% in the past 12 months.

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

Foxconnwho assembles Apple’s iPhones, said his the highest fact of the fourth quarter this week, as it made a strong demand for AI servers.

Meanwhile, Microsoft this month he said that plans to spend $80 billion in its fiscal year through June on building data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.