Taiwan Semiconductor Reports Strong Revenue Growth Amidst AI Boom

November Revenue Hits $8.55 Billion

Taiwan Semiconductor Manufacturing Co TSM announced a notable revenue increase of 34% year-on-year, totaling $8.55 billion in November 2024.

2024 Revenue Surges to $81.05 Billion

From January to November 2024, revenue grew 31.8% compared to the previous year, reaching $81.05 billion. This surge is largely driven by the ongoing demand for artificial intelligence technology.

Market Share Growth Driven by Technology Demand

The chipmaker’s market share rose to 64.9%, up from 62.3% quarter-over-quarter, cementing its position as the leader in the global wafer foundry market. This growth is propelled by strong demand from clients such as Apple Inc AAPL and Nvidia Corp NVDA for advanced 3nm and 5nm technologies.

AI Innovations Are Transforming the Industry

Also Read: Google Quantum AI’s New Willow Chip Can Do in Minutes That Supercomputers Would Take 10 Septillion Years

Production Capacity Fuels Growth

Taiwan Semiconductor’s impressive growth reflects enhanced production capacity utilization and an increase in wafer shipments.

Samsung Faces Increased Competition

In contrast, Samsung Electronics SSNLF has seen its market share dip to 9.3% this quarter from 11.5% in the last, largely due to intensifying competition from Chinese companies.

Stock Performance and Future Plans

Year-to-date, TSM stock has increased by over 96%. The company is expanding its reach beyond Taiwan, aiming to assist countries in developing their semiconductor industries, reducing reliance on China.

Recent reports suggest that Nvidia is considering manufacturing Blackwell AI chips at Taiwan Semiconductor’s Arizona plant. Both Apple and Advanced Micro Devices Inc AMD already rely on the Arizona chip plant for their needs.

Historically, Taiwan Semiconductor has produced Nvidia’s Blackwell chips in its Taiwan facilities, leveraging its chip-on-wafer-on-substrate (CoWoS) capacity.

Geopolitical Risks Capitalize on Opportunities

Despite its success, Taiwan Semiconductor has maintained key production facilities in Taiwan, which poses vulnerabilities amidst geopolitical tensions.

Investment Opportunities for Investors

Investors can gain exposure to Taiwan Semiconductor via the iShares Semiconductor ETF SOXX and the First Trust NASDAQ Technology Dividend Index Fund TDIV.

Price Movement: In premarket trading on Tuesday, TSM stock was down 0.36%, closing at $198.45.

Also Read:

Image via Shutterstock