TLDR:
- TSMC raised its 2024 revenue growth target to 30% after strong quarterly results
- The company expects AI server processor revenue to more than triple this year
- TSMC’s outlook helps alleviate concerns about semiconductor and AI demand
- Chip stocks and Nasdaq futures rose following TSMC’s positive earnings report
- The news countered earlier worries stemming from ASML’s lowered guidance
Taiwan Semiconductor Manufacturing Co. (TSMC) raised its 2024 revenue growth forecast to approximately 30% in US dollar terms, up from its previous projection of mid-20% growth.
The world’s largest contract chipmaker reported better-than-expected earnings for the third quarter of 2024, with net profit rising 54% to NT$325.3 billion ($10.1 billion).
TSMC’s positive outlook comes as a relief to investors concerned about the sustainability of the artificial intelligence (AI) hardware boom and global chip demand.
The company, which serves as the primary chipmaker for industry giants like Nvidia Corp. and Apple Inc., expects revenue from AI server processors to more than triple this year, accounting for a mid-teens percentage of total sales in 2024.
CEO C.C. Wei addressed investor concerns during the earnings call, stating,
“The demand is real and I believe it’s just the beginning.”
Wei’s comments echo sentiments expressed by other industry executives, including Nvidia’s CEO, regarding the growth potential of AI technology.
TSMC’s strong performance and optimistic forecast helped alleviate worries that arose earlier in the week when ASML Holding NV, a key player in the chip industry, reported lower-than-expected orders. ASML’s disappointing results had initially sparked fears of a potential slowdown in the semiconductor sector.
The positive news from TSMC had an immediate impact on the stock market. TSMC’s American depositary receipts rose more than 6% in pre-market trading, while Nvidia’s stock gained about 2.5%. The broader tech sector also benefited, with futures on the tech-heavy Nasdaq 100 climbing 0.7%.

TSMC’s shares have surged more than 70% year-to-date, outperforming many of Asia’s largest tech firms. This remarkable growth reflects the strong sales of Nvidia chips, which are crucial for AI development.
Looking ahead, TSMC anticipates increased capital expenditure in 2025, rising from approximately $30 billion this year. The company is also pursuing rapid international expansion, with plans for more plants in Europe focusing on the AI chip market.
This expansion is in addition to ongoing construction projects in Japan, Arizona, and Germany.
For the fourth quarter of 2024, TSMC expects revenue between $26.1 billion and $26.9 billion, surpassing analyst estimates of $24.9 billion. The company also guided for a gross margin above 57% in the fourth quarter, exceeding consensus expectations of 54.7%.
The semiconductor industry’s outlook remains positive, with steady adoption of artificial intelligence expected to fuel sales of various electronic devices, including smartphones and other gadgets, in the long term.
However, some investors remain cautious about the trajectory of global AI spending, questioning whether major tech companies will continue to invest heavily in chips and data centers without a clear “killer application” for AI technology.
Geopolitical factors also present potential risks to the industry. Recent reports suggest that Biden administration officials have discussed the possibility of capping sales of advanced AI chips from American companies like Nvidia on a country-specific basis.
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