Driven by demand for artificial intelligence chips, TSMC reported a new high in quarterly revenue on Friday. According to analyst forecasts compiled by the London Stock Exchange Group (LSEG), the world's largest chipmaker's revenue from January to March this year reached NT$1.13 trillion (approximately US$35.6 billion), exceeding market expectations of NT$1.12 trillion, a year-on-year increase of 35%.
In March alone, TSMC’s revenue reached NT$415.2 billion, a year-on-year increase of 45.2%.
While concerns remain that conflicts in the Middle East could disrupt supply chains and impact demand, the chip giant has benefited from continued demand for advanced semiconductors from core customers such as Apple and Nvidia.
"We believe TSMC will easily achieve its full-year growth target of 30%," Srevan Kundojala, an analyst at industry analyst firm SemiAnalysis, said in an email to CNBC.
He added: "While the smartphone and PC end markets have been hit by memory shortages, TSMC's artificial intelligence business segment has carried the growth banner."
TSMC's foundry products cover various types of chips from consumer electronics to data centers. It is also one of the main beneficiaries of the hundreds of billions of dollars invested in artificial intelligence infrastructure around the world.
It is one of the few companies in the world that can produce the most cutting-edge chips.
Kundojala said that news that TSMC had raised its quotations for its most advanced chips was an "important factor" in its first-quarter sales exceeding expectations. He also expected TSMC's first-quarter gross profit margin to reach 64%.
Nowadays, more and more companies are beginning to design their own chips: from ultra-large-scale cloud service providers like Google to Arm, which originally only provided semiconductor architecture solutions, it has also launched self-developed central processing units (CPUs). According to reports, artificial intelligence company Anthropic is also exploring self-developed chips, and a large number of start-ups have launched new products in the field of artificial intelligence reasoning.
Most of the manufacturing of these chips needs to be completed by TSMC, or competitors such as Samsung and Intel.
TSMC releases revenue data every month but rarely discloses relevant interpretations or profitability indicators. The company will release its full first-quarter earnings on April 16.
Investors will also focus on next week's earnings report from ASML, which is regarded as a bellwether for the semiconductor industry. The equipment produced by this Dutch company is key equipment for manufacturers such as TSMC to manufacture the world's most advanced chips.