Taiwan Semiconductor Manufacturing Company (TSMC) on Thursday said that it expects a revenue between $25 billion and $25.8 billion. The management further expects the 2025 capital budget to be between $38 billion and $42 billion.
Based on the exchange rate assumption of $1 to 32.8 NT dollars, the gross profit margin is expected to be between 57% and 59%, while the operating profit margin is expected to be between 46.5% and 48.5%, TSMC said while announcing the financial results for the fourth quarter of 2024.
The surge in demand for advanced chips used in artificial intelligence applications continued helped the company to a record revenue of $26.36 billion in the fourth quarter of 2024, which increased 37% y-o-y and increased 14.4% from the previous quarter. The net income of $11.38 billion, and diluted earnings per share of $2.24 per ADR unit.
TSMC is the world’s largest contract chip manufacturer and supplies advanced processors for clients such as Nvidia and Apple and has benefited from the megatrend in favour of AI.
TSMC’s high-performance computing division, which encompasses artificial intelligence and 5G applications, drove sales in the fourth quarter, contributing 53% to its revenue. That HPC revenue was up 19% from the previous quarter.
According to TSMC, the fourth quarter revenue increased 38.8% while net income and diluted EPS both increased 57%. Compared with the previous quarter, the Q4 of 2024 results represented a 14.3% increase in revenue and a 15.2% increase in net income.
The gross margin for the quarter was 59%, operating margin was 49%, and net profit margin was 43.1%.
In the fourth quarter, shipments of 3-nanometer accounted for 26% of total wafer revenue, 5-nanometer accounted for 34%, and 7-nanometer accounted for 14%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 74% of total wafer revenue, TSMC said.
High Demand for 3nm and 5nm
In an earnings’ call, Wendell Huang, Senior VP and Chief Financial Officer of TSMC, said that their business in the fourth quarter was supported by strong demand for the industry-leading 3nm and 5nm technologies.
“Revenue from AI accelerator products accounted for close to a mid-teens percentage of total revenue in 2024. Moving into first quarter of 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand,” Huang added.
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