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Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, saw its stock price soar after reporting robust financial results for the fourth quarter of 2024.
The company’s revenue reached approximately NT$868.46 billion, representing a significant 38.8% year-over-year increase. Net income after tax stood at NT$374.68 billion, marking an impressive 57.0% jump compared to the same period last year.
Investors responded positively to the results, pushing TSMC’s stock higher by over 5% in the hours following the announcement.
The surge underscores confidence in TSMC’s ability to maintain its dominant position in the semiconductor industry, driven by strong demand for advanced chips used in artificial intelligence (AI), 5G technologies, and high-performance computing.
Key Drivers of Growth
The fourth-quarter performance was bolstered by increased demand for TSMC’s cutting-edge 3nm and 5nm process technologies.
These advanced chips are critical components in AI servers, next-generation smartphones, and other high-performance applications. TSMC’s CEO highlighted the company’s strong order pipeline and its pivotal role in powering global technological advancements.
“We continue to see robust demand across multiple sectors, especially AI and high-performance computing. This demand has supported our expansion and strengthened our financial position,” the CEO noted during the earnings call.
Market Reaction
TSMC’s stock, listed on the Taiwan Stock Exchange and as an American Depository Receipt (ADR) on the New York Stock Exchange (NYSE), experienced an uptick in trading volume following the announcement.
By the close of trading, the ADR price on the NYSE had risen over 5%, reflecting investor enthusiasm for the company’s sustained growth trajectory.
Analysts have also revised their outlooks, with several raising their target prices for TSMC shares.
Market experts cited the company’s strategic investments in next-generation manufacturing processes and its resilience amid global economic uncertainties as key factors underpinning their bullish stance.
Outlook for 2025
Looking ahead, TSMC provided optimistic guidance for 2025, projecting continued revenue growth driven by the expansion of its 3nm technology and the anticipated launch of its 2nm process. The company also emphasized its commitment to sustainability, outlining plans to reduce carbon emissions across its production facilities.
As the semiconductor industry faces increasing competition and geopolitical challenges, TSMC’s strong results and positive market reaction highlight its critical role in enabling technological innovation worldwide.
TSMC’s stellar performance reaffirms its position as a leader in the global semiconductor market, with investors and analysts eagerly anticipating further growth and innovation in the coming quarters.