TSMC(US:TSM) The Motley Fool·2025-01-23 14:00Core Viewpoint - TSMC's fourth-quarter 2024 results exceeded Wall Street expectations, leading to a positive market reaction and a nearly 4% increase in its stock price, which also positively impacted peers in the semiconductor industry [1][2]. Financial Performance - TSMC reported a 37% year-over-year increase in fourth-quarter revenue, reaching $26.9 billion, and provided first-quarter 2025 guidance indicating a 35% increase from the previous year [2]. - TSMC's capital expenditures (capex) for 2025 are projected to be between $38 billion and $42 billion, a 34% increase from 2024's capex of $29.8 billion [4]. Industry Impact - TSMC holds a 64% market share in the semiconductor industry, making it a bellwether for the sector, and its strong performance is expected to lift other companies in the industry [3]. - The increase in TSMC's capex is seen as a positive indicator for ASML, a key supplier of semiconductor manufacturing equipment, which has struggled with weak performance due to lower spending on equipment [6][9]. ASML's Outlook - ASML's revenue guidance for 2024 is set at €28 billion ($29 billion), with a slight increase expected in 2025 to between €30 billion and €35 billion ($31 billion to $36.2 billion) [7][8]. - TSMC's increased spending is anticipated to boost ASML's order inflow, as other chipmakers may also place orders to keep pace with TSMC [15]. Advanced Technology Focus - TSMC plans to allocate 70% of its 2025 capex to advanced process nodes, which are critical for manufacturing cutting-edge chips used in AI, HPC, and 5G smartphones [10]. - TSMC's revenue from AI accelerators tripled last year, with expectations to double in 2025 and a forecasted 40% annual increase over the next five years [11][12].