TSMC beats sales estimates as AI chip development continues

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

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

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

In 2024, TSMC’s revenue was 2.9 trillion New Taiwan dollars, the highest annual sales since it went public in 1994.

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

TSMC is regarded as the most advanced chip maker in the world, given its ability to produce advanced semiconductors. The company was helped by strong demand for AI chips, especially from Nvidia, as well as ever-improving semiconductors for smartphones.

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

Wang said that “power utilization” for TSMC’s 3-nanometer and 5-nanometer processes — the state-of-the-art chips — “consistently exceeds 100%.”

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

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

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

Foxconnwhich is engaged in the assembly of Apple iPhones, informed about its the highest profit in the fourth quarter this week as he noted strong demand for AI servers.

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

CNBC’s Jordan Naveth contributed to this report.