TSMC profits surge 57% as demand for AI chips remains high

• TSMC reported net income of $11.6 billion in its fourth-quarter earnings Thursday.
• The company, which makes chips for Nvidia and Apple, is riding the AI boom.
• TSMC's CFO said its results were "supported by strong demand" for its advanced chips.

Taiwan Semiconductor Manufacturing Company has reported record earnings, indicating that demand for AI chips remains strong.

TSMC, the world's largest contract semiconductor manufacturer, reported Thursday that its net income increased 57% year-over-year to NT$374.68 billion, or $11.6 billion.

Revenue between October and December increased by 37% from the year-ago period to $26.88 billion. It was up 14.4% from the previous quarter.

"We forecast our revenue from AI accelerator to double in 2025, as a strong surge in AI-related demand continues," said C.C. Wei, the CEO of TSMC, in an analyst call.

That revenue stream already tripled in size in 2024, he said.

The AI accelerator category covers a slew of products that can power computing-hungry AI models.

TSMC manufacturers chips for companies including Nvidia, Apple, and AMD.

Almost three-quarters of TSMC's revenue from its wafer category — products using a thin slice of semiconductor material — came from what the company defines as its "advanced technologies." These are chips measuring 7 nanometers or smaller.

Nvidia's new flagship AI chip, Blackwell, uses 4-nanometer chips manufactured by TSMC.

In an earnings statement, Wendell Huang, senior VP and chief financial officer at TSMC, said that its results were "supported by strong demand" for its most advanced chips — those measuring 3 nanometers and 5 nanometers.

"Moving into first quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand," Huang said.

In 2024, 35% of TSMC's revenue came from smartphones, while 51% came from high-performance computing.

Earlier this week, the Biden administration introduced new export controls limiting the flow of AI chips to countries that are not US allies. Wei said during the analyst call that the impact of the rules on TSMC's operations is "not significant" and would be "manageable."

TSMC shares were up by nearly 4% after the publication of its earnings and were up more than 90% over the last 12 months.