Taiwan Semiconductor Manufacturing Co. posted revenue that beat analysts’ estimates in the December quarter as the company continues to benefit from the AI ​​boom.

The world’s largest chipmaker reported fourth-quarter revenue of 868.5 billion new Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% from a year earlier.

That beat Refinitiv consensus estimates of 850.1 billion new Taiwan dollars.

In 2024, TSMC’s revenue was 2.9 trillion New Taiwan dollars, its highest annual revenue since its IPO in 1994.

TSMC makes semiconductors for some of the world’s largest companies, including Apple And Nvidia.

Due to its ability to produce cutting-edge semiconductors, TSMC is considered the most advanced chipmaker in the world. The company was supported by strong demand for AI chips, especially from Nvidia, as well as for ever-improving smartphone semiconductors.

“TSMC has benefited significantly from strong demand for AI,” Brady Wang, deputy director at Counterpoint Research, told CNBC.

Wang said “capacity utilization” for TSMC’s 3-nanometer and 5-nanometer processes – its most advanced chips – has “consistently exceeded 100%.”

AI graphics processing units (GPUs), such as those developed by Nvidia, and other artificial intelligence chips are driving this demand, Wang said.

TSMC’s Taiwan-listed shares have risen 88% in the past 12 months.

TSMC’s latest sales figures could also give investors hope that demand for artificial intelligence chips and services could continue into 2025.

Foxconnwhich assembles Apple’s iPhones, this week reported its highest-ever fourth-quarter revenue as the company saw strong demand for AI servers.

In the meantime, Microsoft This month, the company said it plans to spend $80 billion in the fiscal year ending in June to build data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.