TSMC's Outlook is Worrisome Despite Its Q4 Earnings Beat Projections

 

TSMC $TSM posted better-than-expected fourth-quarter earnings on Thursday (Jan. 16) as the company consistently benefits from strong demand for its advanced chips to promote AI.

 

TSMC reported that net income soared 57% to $11.6 billion in the quarter ended Dec. 31, 2024, beating Bloomberg's estimate. The quarterly earnings per share were $2.24.

 

Its revenue was $26.9 billion, increasing nearly 39% YoY. This growth was mainly due to surging sales and market shares of TSMC's advanced 3-nanometer chips.

 

Because companies have strong AI demand, they have pulled up their demand for advanced chips, which continues to boost TSMC's earnings.

 

TSMC's customer list includes tech companies such as Nvidia $NVDA and Apple Inc $AAPL. Their increased capital spending on AI infrastructure, particularly data centers powering AI programs, has benefited TSMC's sales.

 

However, whether the company can continue its growth is uncertain as the US has recently capped exports of advanced chips and AI technology to China.

 

Previously, TSMC received stricter scrutiny in 2024, following reports that its advanced chips were eventually shipped to Chinese tech giant Huawei, which has been blacklisted by the US.

 

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