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TSMC achieves record 35% revenue surge amid strong AI chip demand
TSMC is set to announce its complete first-quarter earnings on April 16
Taiwan Semiconductor Manufacturing Co. announced on Friday its revenue reached new heights in this quarter, driven by strong demand for AI chips.
Between January and March, the globe's top chipmaker recorded a revenue of 1.13 trillion new Taiwan dollars ($35.6 billion), surpassing analysts' expectations of 1.12 trillion new Taiwan dollars, as compiled by LSEG. This represents a 35% rise compared to the previous year.
For the month of March, TSMC reported an impressive 45.2% increase in revenue over last year, totaling 415.2 billion new Taiwan dollars.
The company is experiencing a surge in demand for its advanced chips from major clients like Apple and Nvidia, despite concerns about supply chain issues related to Middle East conflicts and potential impacts on demand.
"We anticipate that TSMC will comfortably surpass its 30% annual growth goal," stated Sravan Kundojjala, an analyst at SemiAnalysis, in an email to CNBC.
"Although smartphone and PC markets faced challenges due to memory shortages," TSMC's AI division "pulled its weight," Kundojjala noted.
TSMC produces chips for a wide range of products, including consumer electronics and data centers, and is significantly benefiting from substantial investments in AI infrastructure.
It is among the few companies globally capable of manufacturing the most advanced chips.
The company has reportedly raised prices for its latest chips, significantly contributing to their revenue victory in the first quarter, Kundojjala explained, predicting a gross margin of 64% for this period for TSMC.
More companies are designing their own chips, from giants like Google to Arm, which historically provided templates for some chips, launching their own central processing unit (CPU).
AI firm Anthropic is also considering the development of its own chip, Reuters reported, while numerous startups are releasing new products targeting AI inferencing markets.
A substantial portion of the production will need to be handled by TSMC or competitors like Samsung and Intel.
Although TSMC consistently releases monthly revenue figures, it typically omits commentary or profitability details.
The company is set to announce its complete first-quarter earnings on April 16.
Investors will be closely watching the earnings from ASML next week, a key player in the semiconductor industry.
The Dutch company manufactures equipment essential for companies like TSMC to produce the most sophisticated chips worldwide.
