(Bloomberg) — Taiwan Semiconductor Manufacturing Co.’s quarterly sales topped estimates, bolstering investors’ hopes that the breakneck pace of spending on AI hardware will continue through 2025.
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Nvidia Corp.’s go-to chipmaker and Apple Inc. reported a 39 percent rise in revenue between October and December, to NT$868.5 billion ($26.3 billion), based on calculations from monthly disclosures. This compares to an average estimate of NT$854.7 billion.
The strong results from Taiwan’s largest company reinforce expectations that major technology companies, from Alphabet Inc. to Microsoft Corp., will continue to build and upgrade their data centers at a rapid pace to propel the development of AI. This month, AI server maker Hon Hai Precision Industry Co. reported better-than-expected sales, while Microsoft announced plans to spend $80 billion this fiscal year on data centers.
Growth accelerated for TSMC in December, capping revenue growth at 34% for 2024. That compares to TSMC’s official target of a 30% annual increase, although that outlook was expressed in dollars Americans. The world’s largest maker of advanced chips has been one of the biggest beneficiaries of the global race to develop artificial intelligence.
TSMC’s market value nearly doubled in 2024 and now trades in the United States at a valuation close to $1.1 trillion. Still, some investors worry about when the AI boom will run out of steam. Although TSMC’s revenue topped, it was only 1.6% above the average projection and fell short of analysts’ most optimistic expectations.
More pessimistic market watchers point to potential overbuilding, development bottlenecks such as power outages, and the continued absence of a killer AI app or service that would use up all server capacity . Investors will want to know TSMC’s outlook for the broader industry when it releases its full earnings report on January 16.
TSMC’s U.S.-listed shares were down 1.3% on Friday, following a broader market downturn – and following reports earlier this week that Nvidia was facing new restrictions on trading. export of chips by the US government.
Beyond Nvidia and the field of AI, the Taiwanese company will have to face the rise of the technology market and geopolitical uncertainties in 2025. TSMC remains dependent on Apple’s activities, as the main producer of iPhone chips . The American company is struggling to galvanize demand for its flagship product in 2025, although many users hope that the gradual addition of AI features will drive the next iteration of the gadget.