Taiwan Semiconductor Manufacturing Company’s logo is seen in the background beside a printed circuit board.
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Taiwan Semiconductor Manufacturing Co. on Friday posted another quarter of record revenue driven by demand for AI chips.
For January to March, the world’s largest chipmaker reported revenue of 1.13 trillion New Taiwan dollars ($35.6 billion), exceeding analyst forecasts of NT$1.12 trillion, according to LSEG’s compiled estimates. That marks a 35% year-on-year increase.
For March alone, TSMC reported a 45.2% year-on-year rise in revenue to NT$415.2 billion.
The chip giant is benefiting from sustained demand for advanced semiconductors from its key customers like Apple and Nvidia, even as concerns persist about supply chain disruptions from the Middle East conflict and the potential impact it will have on demand.
“We think TSMC will easily exceed its 30% annual growth target,” Sravan Kundojjala, an analyst at SemiAnalysis, told CNBC by email.
“While smartphone and PC end markets took a hit due to memory shortages,” the artificial intelligence segment of TSMC’s business “pulled the weight,” Kundojjala added.
TSMC manufactures chips for everything from consumer electronics to data centers, and has been a major beneficiary of the hundreds of billions of dollars being poured into AI infrastructure.
It is one of a very small number of companies that can manufacture the most cutting-edge chips.
TSMC has also reportedly hiked prices for its most advanced chips, which is a “big factor” behind the first-quarter sales beat, Kundojjala said, adding that he is forecasting TSMC to report gross margins of 64% for the first quarter.
There is an increasing number of players designing their own chips, from hyperscalers like Google to Arm, which used to provide the blueprint for certain semiconductors, coming to market with its own central processing unit, or CPU. AI firm Anthropic is also exploring designing its own chip, Reuters reported, while a long tail of startups are bringing new products to market aimed at the area of AI inferencing.
Much of the manufacturing will have to go through TSMC, or its competitors like Samsung and Intel.
TSMC releases monthly revenue figures but offers little commentary or profitability numbers. The company will report its full first-quarter earnings on April 16.
Investors will also be eyeing earnings from ASML next week, a company seen as a bellwether in the semiconductor space. The Dutch giant makes machines that are critical for companies like TSMC to manufacture the most advanced chips in the world.
