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TSMC Fourth-Quarter Profit Expected to Jump 58% Due to AI Chip Demand Surge

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Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading producer of advanced chips for artificial intelligence (AI) applications, is set to report a 58% increase in fourth-quarter profit, driven by strong demand in the AI sector. The company, which counts Apple and Nvidia among its clients, is benefiting from the AI megatrend but faces challenges such as U.S. government technology restrictions on China and potential tariffs under President-elect Donald Trump’s administration.

Analysts estimate that TSMC will post a net profit of T$377.95 billion ($11.41 billion) for the quarter ending December 31, compared to T$238.7 billion in the same period the previous year. This projection follows TSMC’s recent revenue report, which exceeded market expectations. The company will release its revenue outlook in U.S. dollars during its quarterly earnings call on Thursday.

Arete Research analyst Brett Simpson believes TSMC’s growth in 2025 will continue to be driven by AI customers. He is optimistic that TSMC can establish a strong relationship with the incoming U.S. administration, especially given its $65 billion investment in three plants in Arizona. TSMC’s overseas expansion, however, is not expected to diminish its Taiwanese manufacturing base.

Fubon Financial’s Edward Chen noted that the company’s progress in Arizona, including chip yield rates, would be critical for its future performance. He also highlighted the uncertainty regarding how tariffs from the Trump administration may impact demand.

TSMC is expected to provide updates on its current quarter and full-year outlook during its earnings call, including capital expenditure plans. The company has already projected capital expenditure for 2024 to be slightly over $30 billion and indicated that 2025’s capital spending could surpass 2024 levels.

The AI boom has driven up TSMC’s stock, with the company’s shares soaring 81% last year, significantly outperforming the broader market’s 28.5% gain.

 

TSMC Posts Record Profit, Projects Strong Growth Amid AI Surge

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Taiwan Semiconductor Manufacturing Co. (TSMC) has reported a record quarterly profit, signaling robust demand for chips, particularly those used in artificial intelligence (AI) processing. The world’s largest contract chipmaker posted a 57% increase in net income, reaching T$374.68 billion ($11.4 billion) for the quarter ending December 31, 2024. This performance matched analyst expectations, with revenue climbing 39% year-on-year.

Looking ahead, TSMC is projecting significant revenue growth in the first quarter of 2025, with a forecast of approximately 37% growth, bringing in between $25 billion and $25.8 billion. For the full year, the company expects a revenue increase between 20% and 30%, driven by strong AI demand.

Despite a thriving business, TSMC faces challenges from U.S. technology restrictions targeting China. The Biden administration’s recent announcement of tighter controls on AI chip exports has raised concerns, although TSMC’s CEO, C.C. Wei, expressed confidence that these restrictions would be manageable. Wei noted that the company is applying for special permits for clients affected by these curbs and is optimistic about securing approval.

TSMC is also expanding its global footprint with ongoing construction of new fabrication plants (fabs) in the U.S., Japan, Germany, and Taiwan. The company expects its capital expenditure for 2025 to reach between $38 billion and $42 billion, a potential increase of 41%.

The AI boom has significantly boosted TSMC’s stock, making it Asia’s most valuable company. Its stock price surged 81% last year, outperforming the broader market, which saw a 28.5% gain. On Thursday, ahead of the earnings call, TSMC’s shares rose by 3.8%.

 

TSMC Reports 54% Profit Surge Amid AI Boom, Beating Expectations

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Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, announced on Thursday a significant 54% increase in net profit for the third quarter, largely driven by rising demand for AI-related applications. The company posted a net income of 352.3 billion Taiwanese dollars (approximately $10.1 billion) for the July-September period, surpassing an estimated 300.2 billion Taiwanese dollars, according to LSEG data.

TSMC, which counts major technology companies such as Apple and Nvidia among its clients, saw its net revenue climb to $23.5 billion in the third quarter, marking a 36% year-on-year increase. The company’s gross margin also improved, rising to 57.8%, compared to 54.3% in the same period the previous year.

“Our business was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies,” TSMC stated, reflecting the growing global reliance on advanced semiconductors for AI and mobile applications.

In addition to its impressive profit, TSMC’s shares, listed on the Taipei Stock Exchange, have surged nearly 75% year-to-date, highlighting strong investor confidence in the company’s future growth prospects amid the AI-driven semiconductor boom.

Capital expenditure for TSMC edged slightly higher during the third quarter, reaching $6.4 billion, up from $6.36 billion in the previous three months. This increase reflects the company’s ongoing efforts to expand its production capabilities, especially to meet rising demand from the U.S. market.

In line with its global expansion strategy, TSMC is investing $40 billion to construct two chip plants in Arizona, part of its broader commitment to meet U.S. semiconductor needs. Additionally, the company opened its first manufacturing facility in Japan earlier this year.

TSMC’s positive results contrast with recent news from ASML, a key supplier of chip-making equipment to TSMC, which issued a lower-than-expected sales forecast, sending its shares down. Despite such concerns, the AI boom continues to fuel optimism, though some market watchers question the long-term sustainability of this growth. Notably, Foxconn’s CEO, Young Liu, commented last week that the AI frenzy “still has some time to go,” suggesting that advancements in AI models will continue to drive the demand for cutting-edge semiconductors.