Chipmaker Taiwan Semiconductor Manufacturing Co. (TSM), or TSMC, reported a strong year-over-year sales growth of 34% in November, reaching NT$276.06 billion. However, sales declined 12.2% on a sequential basis. Following this mixed performance, shares of the company were down 1.2% in today’s pre-market trading session.
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Meanwhile, for the first 11 months of 2024, TSMC’s revenue totaled NT$2,616.15 billion, reflecting a 31.8% year-over-year increase. The increase is driven by high demand for chips used in artificial intelligence (AI) applications.
TSMC’s Performance Driven by AI Boom
TSMC’s strong performance in November reflects its solid position in the AI sector. As a key supplier to major tech players like Apple (AAPL) and Nvidia (NVDA), the company continues to benefit from strong demand for advanced computing devices and AI-driven solutions.
Interestingly, the company is also benefiting from the recovery in the semiconductor industry. According to a research company, TrendForce, TSMC held a 64.9% share of the global wafer foundry market in the third quarter of 2024, up from 57.9% in the same period in 2023.
To further strengthen its position, TSMC is investing heavily to expand its manufacturing capacity. The company plans to commence mass production of 2-nanometer chips at its Hsinchu factory in Taiwan next year. Also, TSM is expanding its global footprint with new fabrication plants in Arizona, Germany, and Japan. These efforts will enable it to meet the growing demand for chips and maintain its leadership position in the semiconductor industry.
Is TSM a Buy, Sell, or Hold?
Turning to Wall Street, TSM has a Strong Buy consensus rating based on five Buys assigned in the last three months. At $232.50, the average TSMC price target implies 16.73% upside potential. Shares of the company have gained more than 93% year-to-date.
