TSMC Makes Headlines Again with AI Chip Demand Driving Revenue Growth
TSMC, the world’s largest chip manufacturer, achieved a record revenue of $86.85 billion (USD 26.3 billion) in December 2024. This represents a growth of 38.8% compared to the same period in 2023. What’s even more impressive is that it exceeded analysts’ expectations of NT$850.1 billion (USD 26.3 billion).
The annual data has become a hot topic. TSMC’s revenue in 2024 reached NT$2.9 trillion (USD 86.9 billion), the highest annual income reported by the company since its listing in 1994.
For those who thought the demand for AI was just hype, TSMC proves otherwise. It has become a dominant player in the semiconductor market, catering to clients like Nvidia and Apple, who are at the forefront of AI innovation.
AI chips drive TSMC’s rise
AI-focused chips, especially Nvidia’s GPUs, have a high demand. TSMC is the company behind these chips, producing the most advanced semiconductors on Earth. They are designed to power AI workloads, from large data centers to cutting-edge consumer technologies.
TSMC’s chips are at the heart of it all, making them indispensable for companies leading the AI innovation charge.
Even in the smartphone semiconductor market, which may not be as glamorous as AI, TSMC continues to improve, providing a stable source of income. Investors have taken notice, with TSMC’s stock price on the Taiwan Stock Exchange soaring 88% in the past 12 months.
Meanwhile, Microsoft plans to reduce its investment in new data centers by $80 billion by June 2025. Why? It’s simple: to handle AI workloads. Another Taiwanese giant, Foxconn, announced record-high revenue in the fourth quarter, driven by the demand for AI servers.
The global AI market is booming
By the end of 2024, the AI market is valued at $184 billion, a significant increase from $135.9 billion in 2023. This means a growth of nearly $50 billion in just one year. And it doesn’t stop there. With an annual growth rate of 36.6%, the market is expected to reach $826 billion by 2030.
In the third quarter of 2024, AI startups accounted for 31% of global venture capital funding. Everyone wants a piece of the pie, and the potential is enormous.
Generative AI is another hot topic. Over half of companies (specifically 51%) are using it for content creation and customer service. The generative AI market is expected to reach $13 trillion by 2032.
However, the impact on employment is equally important. By 2030, AI is projected to create 133 million new jobs globally. While some industries worry about automation replacing workers, these numbers tell us that AI is more about transformation than elimination.
Governments around the world are closely watching. By 2030, AI is expected to add $15.7 trillion to the global economy, equivalent to a 26% GDP growth. In response, companies are allocating up to 20% of their technology budgets to AI projects. Nearly 58% of companies plan to increase their AI spending by 2025.
But not everything is smooth sailing. For companies adopting AI, data management is a headache. Data storage regulations, especially in the EU and the US, have made the way businesses collect and store information more complex.
Then there’s the issue of trust. Particularly among Generation Z, there are concerns about privacy, bias in AI algorithms, and the security risks associated with adopting these technologies. Companies are trying to address these concerns, but it is a tough battle.
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