Taiwan Semiconductor Manufacturing Company (TSMC) has delivered record-breaking financial results for the fourth quarter of 2024, fueled by surging demand for advanced chips used in artificial intelligence (AI) and other high-performance computing applications. The company, the world’s largest contract chipmaker, exceeded analyst expectations and set new benchmarks for profitability and revenue.
Key Financial Highlights
- Revenue: NT$868.46 billion ($26.36 billion), surpassing the NT$850.08 billion expected by analysts. This marks a 38.8% year-over-year increase.
- Net Income: NT$374.68 billion, beating the NT$366.61 billion forecast. The profit surged by an impressive 57% compared to the same period last year.
These results underscore TSMC’s ability to capitalize on the global AI boom and cement its position as a critical supplier to leading tech giants like Nvidia and Apple.
AI and High-Performance Computing Drive Growth
TSMC’s high-performance computing (HPC) division played a pivotal role in the company’s success, contributing 53% of total revenue in the fourth quarter. Revenue from this segment grew by 19% quarter-over-quarter, driven by robust demand for AI accelerators and 5G-related chips.
According to Brady Wang, Associate Director at Counterpoint Research, the demand for AI chips in the fourth quarter “exceeded expectations.” Advanced processors used in AI applications and Apple’s iPhone 16 models were key growth drivers.
In an earnings call, Wendell Huang, TSMC’s Chief Financial Officer, revealed that AI accelerator products accounted for a “mid-teens percentage” of total revenue in 2024. He also projected that revenue from this category will double in 2025 as AI applications continue to expand across industries.
A Record-Breaking Year for TSMC
TSMC wrapped up 2024 with a record-breaking annual revenue of NT$2.9 trillion, the highest since the company went public in 1994. This highlights a year of extraordinary growth, fueled by the megatrend in AI and high-performance computing.
TSMC’s stock has also reflected its strong performance. Shares of the Taiwan-listed company surged 81% in 2024 and continued their upward momentum, trading 3.75% higher on Thursday.
Challenges on the Horizon
Despite the stellar results, TSMC faces potential headwinds in 2025. U.S. restrictions on advanced semiconductor exports to China, coupled with uncertainties surrounding the trade policies of President-elect Donald Trump, could create challenges for the chipmaker. Trump, who will take office next week, has previously criticized Taiwan for “stealing” the U.S. chip business and threatened broad tariffs on imports.
However, industry experts remain optimistic. Counterpoint’s Wang anticipates another strong year for TSMC in 2025, driven by expanding AI-related demand and the diversification of AI applications.
Ripple Effects in the Semiconductor Industry
TSMC’s performance has had a positive ripple effect on the global semiconductor sector. Stocks of European semiconductor companies rose on Thursday, with ASML gaining 3.5%, ASM International increasing by 3.75%, and Besi climbing 5.1%.
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