TSMC's Q4 2024 Net Income Soars 57% to $11.4B on AI Chip Demand, Forecasts Strong 2025 Growth

Jan 16, 2025, 06:39 AM

Taiwan Semiconductor Manufacturing Company (TSMC) reported a record-breaking fourth quarter for 2024, with net income surging 57% year-over-year to NT$374.68 billion (approximately $11.4 billion), surpassing analyst estimates. The company's revenue for the quarter rose 38.8% to NT$868.46 billion (about $26.38 billion), also beating expectations. This performance was driven by robust demand for AI chips, with TSMC forecasting revenue from AI accelerators to double in 2025 after more than tripling in 2024. The company anticipates a mid-40% compound annual growth rate (CAGR) for AI accelerators over the next five years. TSMC also provided guidance for the first quarter of 2025, expecting sales between $25 billion and $25.8 billion, and announced a significant increase in capital expenditure for 2025, projected at $38 billion to $42 billion, up from $29.8 billion in 2024. The fourth quarter revenue increase was supported by strong demand for TSMC's industry-leading 3nm and 5nm technologies, with high performance compute applications accounting for over 50% of total revenue. CFO Wendell Huang noted that the fourth quarter revenue increased 14.3% sequentially in NT, driven by these advanced technologies. CEO C.C. Wei emphasized that AI accelerators accounted for a mid-teens percentage of total revenue in 2024, and he expects robust AI-related demand to continue. Despite geopolitical tensions and U.S. export controls affecting its operations, TSMC remains optimistic about its growth prospects, particularly in the AI sector.