TSMC Achieves Record Revenue for 2024
Taiwan Semiconductor Manufacturing Company (TSMC) has posted remarkable financial results, with record-breaking revenues of approximately $26.3 billion for the October-December period of 2024. This marks a 39% year-on-year (YoY) increase, surpassing analyst expectations. TSMC’s total revenue for 2024 is set to reach an estimated $88 billion, the highest in the company’s 30-year history since its public listing in 1994.
The reported figure of $26.3 billion reflects monthly revenue from October to December, and it is important to note that this figure is not adjusted for foreign exchange fluctuations. For December alone, TSMC saw a significant 57.8% YoY growth, reaching around $8.4 billion in revenue.
TSMC’s Expanding U.S. Presence: A New Apple Product for Arizona Fab
In addition to its financial success, TSMC is making strides in its global manufacturing capacity. The company has secured a second Apple product for production at its Arizona fabrication plant. This follows the earlier announcement that TSMC would produce AMD’s Ryzen 9000 series, codenamed “Grand Rapids,” at its Phoenix-based facility. The company is also reportedly in talks with Nvidia to manufacture its Blackwell architecture at the site, indicating a growing diversification of TSMC’s client base.
TSMC is currently constructing three fabs in Phoenix, Arizona. Two of these fabs will focus on the production of advanced 4nm and 3nm semiconductors, while the third will specialize in 2nm chips. The production of Apple’s A16 Bionic chip has already commenced at Fab 21, using TSMC’s N4P process, an extension of its 5nm process. The N4P process promises up to 11% higher performance and 22% greater power efficiency compared to the previous N5 process.
U.S. Government Investment Under CHIPS and Science Act
As part of its expanding U.S. operations, TSMC received significant support from the U.S. government under the CHIPS and Science Act. In November 2024, TSMC was awarded $6.6 billion in direct funding, supporting its $65 billion investment in Arizona. This partnership aims to strengthen U.S. semiconductor manufacturing and reduce reliance on foreign production.
TSMC Faces Geopolitical Challenges and Regulatory Scrutiny
Despite its financial successes, TSMC has faced several challenges in 2024. In November, the company made the decision to halt production of advanced chips for Chinese semiconductor design firms, following an investigation by the U.S. government into potential sanctions violations. This move came after TSMC disclosed that a customer had placed an order for a chip similar to Huawei’s Ascend 910B, a product the company had previously manufactured before U.S. sanctions were imposed in 2020.
While there is no indication that TSMC knowingly violated sanctions, the company has been cautious about navigating the complex geopolitical landscape, especially amid potential changes in U.S. leadership. In an interview prior to the 2024 election, former President Donald Trump criticized Taiwan’s chip industry, asserting that Taiwan had “stolen” the U.S. chip business. TSMC is likely monitoring the situation closely, aware of the potential impact of such statements on its operations and diplomatic relations.
FAQ Section
1. What factors contributed to TSMC’s record revenue in 2024?
TSMC’s revenue growth was driven by increased demand for semiconductors, particularly in high-performance chips for companies like Apple and AMD. The company’s expansion in Arizona and government support under the CHIPS Act also contributed to its success.
2. How has TSMC expanded its production capacity in the U.S.?
TSMC is building three advanced semiconductor fabs in Phoenix, Arizona, focused on producing 4nm, 3nm, and 2nm chips. This move is part of a broader strategy to strengthen its U.S. manufacturing capabilities and reduce dependence on foreign production.
3. Why did TSMC halt production of advanced chips for Chinese firms?
TSMC stopped production for Chinese semiconductor firms due to concerns over potential violations of U.S. sanctions, particularly after an investigation was launched regarding a customer order for a chip resembling Huawei’s Ascend 910B.
4. What is TSMC’s N4P process, and how does it benefit its clients?
TSMC’s N4P process is an extension of its 5nm process, offering a performance boost of 11% and a power efficiency improvement of 22% compared to the previous generation. This makes it an attractive option for high-performance chip production, such as Apple’s A16 Bionic chip.
5. How is TSMC responding to geopolitical tensions?
TSMC is closely monitoring geopolitical developments, particularly in relation to U.S.-China tensions and the potential impact of U.S. political leadership on the semiconductor industry. The company’s decision to halt production for Chinese firms is part of its strategy to navigate these complexities.
