TSMC released its monthly revenue for February on March 10th. Revenue grew by 43.1% YoY and down (-11.3%) MoM to NT$260.01 billion. February 2025 revenue was the new high for the month. In U.S. dollar terms revenue grew by 37.3% YoY to $7.93 billion using the average exchange rate of 1 US dollar to 32.78 NT dollars. This strong performance, coupled with Foxconn's impressive 56.4% year-over-year monthly revenue growth in February, suggests robust and sustained demand for AI.
A closer look at TSMC's monthly revenue reveals that month-over-month figures can be volatile. The February decline is likely attributable to seasonal factors, such as the Lunar New Year holidays and fewer working days. For context, February 2024 also saw a MoM revenue decrease of (-15.8%). This suggests that the recent month-over-month decline is not unusual and should be considered within the context of seasonal trends.
The management had provided an update last month that they expect the Q1 revenue to be near the lower end of the guidance range of $25 billion and $25.8 billion due to the Taiwan earthquake in January. Importantly, TSMC maintains its strong outlook for the full year 2025, anticipating revenue growth in the mid-20% range in US dollar terms, driven by robust AI demand.
Sustained sequential HPC growth
As the leading foundry for AI accelerators, TSMC is riding the enormous wave of demand from Big Tech. The chipmaker’s high-performance computing (HPC) revenues rose 19% QoQ to a record $14.25 billion and accounted for 53% of revenue in Q4, surpassing the 50% mark for the third time. The sequential HPC growth for the six consecutive quarters is a further testament that there is no AI demand slowdown and demonstrates sustained momentum in the AI sector. Management expects AI accelerators to be the strongest driver of the HPC platform growth in the next several years.
The above chart shows that TSMC’s HPC sequential revenue growth tells us that they're a few quarters ahead of Nvidia's bigger quarters like the 2022 sequential growth before the launch of Hopper Architecture.
TSMC is experiencing explosive growth in its AI segment, with revenue tripling in 2024. Management expects this remarkable growth to continue, projecting a further doubling of AI revenue in 2025.
Management expects AI accelerators to grow mid-40% CAGR for the next five years and expects AI accelerators to be the strongest driver of the HPC platform growth and the largest contributor in terms of the overall incremental revenue growth in the next several years.
The chart below further emphasizes the strength of TSMC's high-performance computing (HPC) segment, with revenue reaching a record $14.25 billion in the most recent quarter. This represents the largest sequential increase to date, surging by approximately $2.26 billion. This data underscores the significant growth trajectory of TSMC's HPC business, driven by robust demand for AI accelerators.
TSMC's Advanced Packaging in High Demand: NVIDIA Leads the Charge
TSMC also reported a surge in Advanced Packaging due to the strong demand for Nvidia’s Blackwell chips. NVIDIA has reportedly secured over 70% of TSMC's CoWoS-L capacity for 2025, with shipments expected to exceed 2 million units and grow by more than 20% each quarter, according to a report from Economic Daily News. The report also estimates that advanced packaging revenue accounted for approximately 8% of TSMC’s revenue in 2024 and is expected to exceed 10% in 2025.
TSMC, which is struggling to meet the strong demand for advanced packaging, plans to double production capacity this year to 75,000 wafers a month, according to a report from Taiwan Economic Daily. Furthermore, TSMC is projected to continue expanding CoWoS production in the coming year, reaching 90,000 wafers per month in 2026.
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