Taiwan Semiconductor Manufacturing was gaining early Friday after better-than-expected sales figures helped dispel concerns about a bubble in artificial-intelligence spending.
TSMC reported December revenue of 335.00 billion New Taiwan dollars ($10.60 billion), up 20% from the same month the previous year. That brought the Taiwanese chip manufacturer's fourth-quarter sales overall to 1.046 trillion New Taiwan dollars, beating expectations of $1.018 trillion New Taiwan dollars, according to a FactSet poll of analysts' expectations.
American depositary receipts of TSMC were up 0.8% in premarket trading, having gained 53% over the past 12 months. U.S.-listed shares of Dutch chipmaking equipment company ASML Holding --which sells machines to TSMC-- were up 4%.
TSMC is the main supplier of chips to Nvidia -- the leader of semiconductors used for AI applications. TSMC also makes the core processors inside Apple iPhones, Qualcomm mobile chipsets, and processors made by Advanced Micro Devices.
TSMC doesn't issue commentary alongside its monthly report and will report its full fourth-quarter earnings on Jan. 15, but all the signs are that AI demand continues to be strong.
The company previously raised its guidance for revenue growth in 2025 to the middle range of 30%-40%, from about 30% in U.S. dollar terms. The main driver of that growth is AI-related chip revenue, which TSMC has previously said it expects to have doubled in 2025 and grow at a mid-40% annual rate for the next five years.
Analysts at J.P. Morgan recently backed TSMC to keep more than a 95% market share in manufacturing 2-nanometer scale chips, representing the coming generation of advanced AI processors, despite efforts by Intel to break its dominance.
