TSMC once again made headlines with its artificial intelligence breakthrough. The world’s largest chipmaker reported a record revenue of NT$868.5 billion ($26.3 billion) in December 2024.
This represents a 38.8% increase compared to the same period in 2023. Impressively, it exceeded analysts’ expectations of NT$850.1 billion.
The annual data has become a hot topic. TSMC’s 2024 revenue reached NT$2.9 trillion, marking its highest annual income since going public in 1994.
For those who thought the demand for artificial intelligence was just hype, TSMC has proven otherwise. It has established its dominance in the semiconductor market with clients like Nvidia and Apple, who heavily rely on its meticulously designed chips.
AI chips propel TSMC’s rise
AI-focused chips, particularly Nvidia’s GPUs, have high demand. TSMC is the company behind these chips, producing the most advanced semiconductors on Earth. They are designed to power AI workloads ranging from large data centers to cutting-edge consumer technologies.
TSMC’s chips are at the core of it all, making them indispensable for companies at the forefront of AI innovation.
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, as TSMC’s stock price on the Taiwanese market has surged 88% in the past 12 months.
Meanwhile, Microsoft plans to reduce its investments in new data centers by $80 billion by June 2025. The reason? Dealing with AI workloads, plain and simple. Another Taiwanese giant, Foxconn, announced that its fourth-quarter revenue reached a historic high, driven by the demand for AI servers.
The global AI market is booming
By the end of 2024, the AI market will be valued at $184 billion, a significant increase from $135.9 billion in 2023. This means a nearly $50 billion growth in just one year. And it doesn’t stop there. With an annual growth rate of 36.6%, the market is projected to reach $826 billion by 2030.
In the third quarter of 2024, AI startups secured 31% of global venture capital funding. Everyone wants a piece of the pie, and it’s easy to see why. The potential is immense.
Generative AI is another hot topic. Over half of companies, precisely 51%, are using it for content creation and customer service, among others. The generative AI market is expected to reach $1.3 trillion by 2032.
However, the impact on employment is equally important. By 2030, AI is projected to create 133 million new jobs worldwide. 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 contribute $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 AI spending by 2025.
But not everything is smooth sailing. For companies adopting AI, data management is a major headache. Data storage regulations, particularly in the EU and the US, have made the collection and storage of information complex for businesses.
Then there’s the issue of trust. Especially among Generation Z, concerns about privacy, bias in AI algorithms, and the security risks associated with adopting these technologies are prevalent. Companies are striving to address these concerns, but it’s an uphill battle.
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