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Taiwan Semiconductor Manufacturing Company’s (TSM+4.59%) U.S.-listed shares rose by more than 6% at the market open on Thursday morning.
The chipmaker’s stock was up by more than 5% during pre-market trading after its fourth-quarter earnings results beat expectations. Later in the morning, TSMC’s shares were up by around 5.6%.
The company reported net revenue of NT$868.46 billion, or $26.36 billion, and record net income of NT$374.68 billion, or about $11.3 billion for the quarter ended December 31.
TSMC said its fourth quarter revenue increased 38.8% year over year, while net income rose 57% from the previous year to a record high.
“Our business in the fourth quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies,” Wendell Huang, chief financial officer of TSMC, said in a statement. “Moving into first quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand.”
Shipments of advanced 3-nanometer chips made up 26% of total wafer revenue, TSMC said, while advanced 5-nanometer chips accounted for 34%, and 7-nanometer chips were 14% of the total.
On a post-earnings call with analysts, TSMC chief executive C.C. Wei said the company “observed robust AI-related demand from our customers throughout 2024.” Revenue from TSMC’s AI accelerators “accounted for close to mid-teens percent of our total revenue in 2024,” Wei said.
The Taiwanese chipmaker set revenue guidance for the first quarter of 2025 at between $25 billion and $25.8 billion — higher than a consensus by analysts of $24.4 billion, according to a Jefferies (JEF+0.47%) note.
Wei said TSMC’s first fab in Arizona entered high-volume production in the fourth quarter using the 4-nanometer process, and reached a yield comparable to its facilities in Taiwan. The chipmaker expects “a smooth ramp-up process,” Wei said, and is confident in having “the same level of manufacturing quality and reliability from our fab in Arizona as for our fab in Taiwan.” TSMC is also on track with its second and third Arizona fabs, Wei said.
Earlier this week, the Biden administration introduced new rules encouraging chip producers such as TSMC to improve customer scrutiny and due diligence in an effort to prevent advanced chips from getting to Chinese customers.