TSMC beats sales estimates as AI chip push continues

Taiwan Semiconductor Manufacturing Co. posted revenue for the December quarter that topped analysts’ estimates as the company continues to gain momentum from the AI ​​boom.

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

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

By 2024, TSMC’s revenue was 2.9 trillion New Taiwan dollars, the highest annual sales since 1994.

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

TSMC is seen as the world’s most advanced chipmaker, given its ability to manufacture cutting-edge semiconductors. The company has been helped by strong demand for its AI chips, particularly from Nvidia, as well as its ever-improving smartphone semiconductors.

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

Wang said “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 that demand, Wang said.

Shares in Taiwan-listed TSMC are up 88% over the past 12 months.

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

FoxconnThe person who assembles Apple’s iPhones gave his news highest fourth quarter revenue ever this week, as it has gotten a lot of demand for AI servers.

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

CNBC’s Jordan Novet contributed to this report.