Apple and Nvidia chip supplier TSMC’s sales top estimates, boosting AI’s 2025 outlook

The world’s largest contract chipmaker reported a 39 per cent rise in October-December revenue to US$26.3 billion

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Taiwan Semiconductor Manufacturing Co’s latest quarterly results raise hopes of increased artificial intelligence chip spending in 2025. Photo: Shutterstock

Published: 5:57pm, 10 Jan 2025

Quarterly sales of Taiwan Semiconductor Manufacturing Co (TSMC) topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending will extend into 2025.

The go-to chipmaker for Apple and Nvidia reported a 39 per cent rise in October-December revenue to NT$868.5 billion (US$26.3 billion), based on calculations off monthly disclosures. That compares with an average estimate of NT$854.7 billion.

The strong showing from Taiwan’s largest company bolsters expectations that Big Tech companies, from Google parent Alphabet to Microsoft, will continue to build and upgrade data centres at a rapid clip to propel AI development.

This month, Taiwanese AI server maker Foxconn Technology Group – formally known as Hon Hai Precision Industry – reported better-than-expected sales, while Microsoft outlined plans to spend US$80 billion in its current financial year on data centres.

Growth accelerated for TSMC in December, capping 34 per cent revenue growth for 2024. That compares with TSMC’s official target of a 30 per cent annual rise, though that outlook was expressed in US dollar terms. The world’s largest contract manufacturer of advanced chips has been one of the biggest beneficiaries of a global race to develop AI.

A view of Taiwan Semiconductor Manufacturing Co’s chip fabrication plant in Taichung, Taiwan’s second-largest city. Photo: Shutterstock

TSMC’s market value nearly doubled in 2024, and it now trades in the United States at a valuation close to US$1.1 trillion. Yet some investors worry about when the AI boom will peter out.