TSMC Q1 revenue climbs 35 percent on AI demand growth
TSMC reported a 35 percent rise in first-quarter revenue to $35.71 billion, beating market forecasts. This growth was driven by strong demand for AI chips.
TSMC Global Ltd, the world's largest contract chipmaker based in Taiwan, reported a significant 35% surge in its first-quarter revenue on Friday. This performance exceeded market expectations, driven largely by the sustained global demand for artificial intelligence applications. Total revenue for the January-March period reached T$1.134 trillion, equivalent to approximately $35.71 billion, marking a substantial increase from the T$839.3 billion recorded during the same timeframe last year.
The reported figures surpassed the LSEG SmartEstimate of T$1.125 trillion, which was based on projections from 20 analysts. The results also aligned with the previous guidance provided by the company in United States dollar terms, which ranged between $34.6 billion and $35.8 billion. This record-breaking revenue comes despite broader economic concerns, including rising energy costs and market volatility stemming from ongoing conflicts in the Middle East.
While some analysts warned that geopolitical instability could potentially disrupt the supply chain for semiconductor production materials or delay investments in AI data centers, the outlook for the industry remains optimistic. Forecasts for the April-June quarter have already been revised upward by 2.3% over the last month, with expectations for revenue to hit a new record of T$1.2 trillion. This confidence is bolstered by the limited capacity for advanced AI chip production, which continues to drive earnings for major players.
The company has emerged as a primary beneficiary of the AI boom, which has helped mitigate the impact of declining demand for consumer electronics like tablets following the pandemic. Key clients such as NVIDIA CORP have been instrumental in this growth. Reflecting this positive momentum, the firm's Taipei-listed shares have climbed 29% this year, outperforming the benchmark index's 22% rise.
Similar trends were observed with FOXCONN TECHNOLOGY CO LTD, the world's largest contract electronics manufacturer and a major server supplier for Nvidia. The company also reported robust first-quarter sales, noting a 30% year-on-year increase. TSMC is scheduled to provide a more detailed first-quarter earnings report and an updated outlook for the remainder of the year on April 16.
