Taiwanese Chip Stocks Surge Amid AI Boom, TSMC Earnings in Focus

Taiwanese chipmakers reported strong revenues in Q4 2024, fueled by rapid advancements in artificial intelligence (AI). Major players like TSMC (TW:2330), MediaTek Inc (TW:2454), ASE Industrial Holding Co Ltd (TW:3711), and KYE Systems Corp (TW:2365) saw robust December sales, signaling solid quarterly growth. Analysts at Citi project continued momentum in the AI supply chain, bolstered by upgrades in edge AI devices and a weaker Taiwan dollar.

Citi highlighted TSMC, MediaTek, ASEH, and KYEC as top semiconductor picks. For downstream chip firms, their preferences included Quanta Computer Inc (TW:2382), Wiwynn Corp (TW:6669), Hon Hai Precision Industry Co Ltd (TW:2317), Delta Electronics Inc (TW:2308), Lotes Co Ltd (TW:3533), Accton Technology Corp (TW:2345), Asustek Computer Inc (TW:2357), and Aspeed Technology (TWO:5274).

TSMC, Taiwan’s largest company and the world’s top chipmaker by production capacity, is set to release its Q4 earnings on January 16. Analysts anticipate a 58% profit surge, with revenue growth of nearly 28% year-over-year. AI-driven demand has played a crucial role in TSMC’s success, and Citi expects the company to forecast 10-15% year-over-year growth in the non-memory semiconductor sector, supported by normalized inventories and edge AI device upgrades.

While AI demand remains strong, the outlook for chips in consumer electronics, including computers and personal devices, is less optimistic. However, Citi sees potential for recovery in 2025, driven by increasing consumer interest in AI applications.

Taiwan’s chip industry is poised for sustained growth, with AI advancements paving the way for significant opportunities in both upstream and downstream segments.