Taiwan Semiconductor Manufacturing Company (TSM) reported a sharp rise in fourth-quarter revenue on Friday, beating market forecasts. The company said revenue increased 20.45% from a year earlier.

The result underscored strong demand for the company’s advanced AI chips. Interest in artificial intelligence applications continued to drive orders during the quarter.

TSMC is the world’s largest contract chipmaker. It plays a central role in the global semiconductor supply chain.

The company said the revenue increase exceeded expectations from the market. Investors had been watching the quarter closely for signs of sustained growth.

TSMC has emerged as a key beneficiary of the rapid expansion of artificial intelligence. Demand linked to AI has supported revenue growth.

That strength has helped offset weaker demand in other areas. Sales of chips used in consumer electronics have cooled after a pandemic-driven surge.

Products used in devices such as tablets have seen slower growth. The company said AI-related demand more than compensated for that decline.

TSMC counts major technology firms among its customers. These include Nvidia and Apple.

The company will provide further details later this month. It is scheduled to release its full earnings and outlook on January 15.

Investors have rewarded the company’s performance. TSMC shares rose 44.2% over the past year, outperforming the broader market.

The revenue figures highlight TSMC’s position in advanced chip manufacturing. Its production capabilities remain critical for high-performance computing.

The company’s fabrication plants support cutting-edge semiconductor processes. These facilities enable large-scale production for global clients.

TSMC did not provide additional guidance on Friday. The company said more information would be shared during the upcoming earnings call.

Market attention remains focused on future demand trends. AI-related investment continues to shape the outlook for the chip industry.

The fourth-quarter performance added to a year of strong gains. TSMC remains closely watched as a bellwether for global semiconductor demand.