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TSMC earnings 'shatter' analyst expectations

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Taiwan Semiconductor Manufacturing Company (TSMC) has published its earnings for the fourth quarter of the fiscal year.

TSMC – the dominant player in the chip manufacturing industry – notably exceeded analyst estimates in recent quarters, prompting investors to expect comparable outcomes on Thursday.

They were not disappointed, with the company reporting record quarterly profit, shattering analyst expectations. The semiconductor giant reported a net income of $11.59 billion and an earnings per share (EPS) of $2.24 – Wall Street analysts predicted an EPS of $2.16. TSMC is anticipating further revenue growth during the first quarter of this year as demand for chips utilised in artificial intelligence (AI) processing continues surging.

Off the back of these strong results, the firms share price rose by around 5 percent. In fact, TSCM’s strong results fuelled further investor confidence in the industry, leading to a rally in other chip stocks – Lam Research and KLA Corp also saw their share prices increase significantly.

Kate Leaman, chief market analyst at AvaTrade, comments on TSMC’s quarterly earnings report and what caused the share price to rise, as well as the company’s outlook for the year ahead: “TSMC’s Q4 results were outstanding, breaking records for both revenue and profit. AI demand is a huge part of the story. As the world’s largest chip manufacturer, TSMC has greatly benefited from the AI boom, with companies like Apple and Nvidia heavily reliant on the semiconductor giant for chip production for their products. AI accelerators now make up a significant portion of TSMC’s revenue, showing how important this technology has become in driving their business.

“TSMC’s strong Q1 2025 forecast also indicates sustained demand. The exciting aspect of this is that the rise in demand is not merely a temporary surge; rather, it signifies fundamental transformations in the ways technology and AI are reshaping the global landscape. What’s clear from TSMC’s earnings is that a key industry like tech is showing real strength as we head into 2025. These results don’t just highlight the company’s success – they also give us a sense of where the broader economy is heading.

“In the short to medium term, the demand for AI applications, data centres, and advanced semiconductor technology is expected to remain robust. Consequently, firms such as TSMC are likely to maintain impressive performance due to these rapidly expanding sectors. While it is important to monitor how factors like lead times may influence future growth, for now, the AI boom is supporting sustained growth for TSMC and other chipmakers.”

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