Taiwan's leading semiconductor manufacturer, TSMC, announced a significant 16.5% increase in revenue for the first quarter, surpassing market forecasts and reaching the upper limit of its own projections. This growth is largely fueled by the rising demand for artificial intelligence (AI) applications.
As the foremost contract chipmaker globally, TSMC serves high-profile clients such as Apple (AAPL, Financial) and Nvidia (NVDA, Financial), capitalizing on the AI boom. This surge has enabled TSMC to overcome the decline in demand following the pandemic, propelling its stock to unprecedented heights.
The company disclosed that its revenue for the initial three months reached T$592.64 billion ($18.54 billion), an increase from $16.72 billion in the same period last year. This performance is at the higher spectrum of TSMC's earlier revenue forecast, which estimated figures between $18 billion and $18.8 billion.
Analysts' expectations were exceeded as well, with a consensus estimate of T$581.45 billion according to an LSEG SmartEstimate, which prioritizes the predictions of top analysts. Despite the typical slowdown experienced by Taiwanese tech companies in the first half due to the post-holiday season lull in Western markets, the demand spurred by AI advancements has kept TSMC's momentum going.
For March alone, TSMC reported a remarkable 34.3% year-on-year increase in revenue to T$195.21 billion, also noting a 7.5% rise from the previous month. Despite its status as Asia's most valuable publicly traded company with a market cap of $662 billion, TSMC has withheld specific details or future projections in its recent revenue announcement.
The company is poised to unveil its first-quarter earnings on April 18, at which point it will provide an updated forecast for the upcoming quarter and the rest of the year. Analysts are anticipating a 4% increase in TSMC's first-quarter net profit, according to another LSEG SmartEstimate.
Before the announcement, TSMC's shares in Taipei saw a slight decrease of 0.5%, while the broader market dipped by 0.2%. However, TSMC's shares have experienced a remarkable 37% surge this year, outperforming the broader market's 16% increase.
