Taiwan Semiconductor Manufacturing Co reported another record quarter for revenue on Friday, fueled by AI chip demand.
From January to March, the largest chipmaker globally reported earnings of 1.13 trillion new Taiwan dollars ($35.6 billion), surpassing analyst predictions of 1.12 trillion new Taiwan dollars, based on estimates compiled by LSEG. This represents a 35% increase year-over-year.
In March, TSMC saw a 45.2% annual revenue growth, reaching 415.2 billion new Taiwan dollars.
The chip titan is benefiting from ongoing demand for advanced semiconductors from key clients such as Apple and Nvidia, even though there are still worries about supply chain issues due to the Middle East conflict and its potential effects on demand.
“We believe TSMC is set to surpass its target of 30% annual growth,” said Sravan Kundojjala, an analyst at SemiAnalysis, via email to CNBC.
“Although end markets for smartphones and PCs faced difficulties due to memory shortages,” TSMC’s AI sector “shouldered the burden,” Kundojjala stated.
TSMC produces chips for a wide range of applications from consumer electronics to data centers and has been a significant recipient of the extensive investments in AI infrastructure.
It remains one of the few companies capable of fabricating the most advanced chips currently available.
TSMC has also reportedly increased prices for its latest chips, which is a “major contributor” to the sales success in the first quarter, Kundojjala noted, predicting that TSMC will achieve gross margins of 64% for the first quarter.
An ever-growing number of companies are developing their own chips, including hyperscalers like Google and Arm, which previously provided blueprints for certain semiconductors, launching its own CPU. AI startup Anthropic is also considering creating its own chip, as reported by Reuters earlier, while a series of startups are introducing new products targeting AI inferencing.
Much of the production will still likely rely on TSMC or its rivals such as Samsung and Intel.
While TSMC releases monthly revenue figures, it provides limited insights on profits. The firm is set to announce its full earnings for the first quarter on April 16.
Investors will also be looking for earnings results from ASML next week, a firm regarded as a bellwether in the semiconductor industry. The Dutch giant produces machines essential for companies like TSMC to fabricate the most advanced chips globally.
