TSMC exceeded expectations with a 39% revenue rise in Q4 2024 and $88B for the total year, driven by booming AI hardware demand from key clients like Nvidia and Apple. Despite impressive growth, TSMC faces questions about the sustainability of the AI boom in a market with potential overcapacity, geopolitical tensions, and bottlenecks like power shortages. Analysts are watching TSMC’s January 16 earnings call for updates on its CoWoS packaging for AI chips, US fab progress, and next-gen node adoption. The company’s long-term strategy includes expanding its global footprint with new facilities in Europe, Japan, and the US. At the same time, capital expenditure is projected to rise in 2025, optimism for AI-driven growth.
My Take
TSMC’s conservative guidance, starting 2025 with a low 20% dollar growth projection, masks a calculated strategy to outpace competitors by doubling down on next-generation nodes and AI-centric manufacturing capacity.
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Credit: Bloomberg
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