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TSMC Reports Record Quarterly Profit, Expects Strong Growth in Early 2025

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Taiwan Semiconductor Manufacturing Co (TSMC) has posted a record-breaking quarterly profit, reporting a 57% increase in net income to T$374.68 billion ($11.4 billion) for the quarter ending Dec. 31. This surge in profit aligns with the company’s bullish outlook for the future, as revenue jumped by 39% compared to the same period last year. TSMC has forecasted continued strong performance, with a revenue growth estimate of about 37% for the first quarter of 2025, projecting earnings between $25-25.8 billion. For the full year, TSMC expects revenue growth to be between 20% and 30%, driven largely by the demand for chips used in artificial intelligence (AI) processing.

While TSMC’s business is thriving, it faces challenges stemming from U.S. government restrictions on AI chip exports to China. The Biden administration recently announced further curbs on these exports, which could affect demand from clients. However, TSMC’s CEO, C.C. Wei, expressed confidence that the company could manage these restrictions, stating that they are currently applying for special permits for affected clients and anticipating approval. He also emphasized the company’s strong communication with both the current and incoming U.S. administrations.

TSMC’s growth is also supported by its ambitious expansion plans, including new fabs in the United States, Japan, Germany, and Taiwan. For 2025, TSMC has set its capital spending target between $38 billion and $42 billion, marking a potential 41% increase. The AI-driven boom has significantly boosted TSMC’s stock price, which surged 81% in 2024, outperforming the broader market’s 28.5% growth.

 

Nvidia Shifts Focus to New Advanced Packaging Technology

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Nvidia’s CEO Jensen Huang confirmed that while the company’s demand for advanced packaging from TSMC remains robust, the specific type of technology required is evolving. At an event in Taichung, Taiwan, Huang explained that Nvidia is transitioning its focus from CoWoS-S to CoWoS-L for its upcoming Blackwell AI chips. This shift, however, does not signal a reduction in capacity, but rather an increase in the use of CoWoS-L, a newer, more advanced version of TSMC’s chip packaging technology.

Nvidia had previously relied heavily on CoWoS-S for its AI chips, including the Hopper platform. As the company moves into Blackwell, which was unveiled in March 2024, it plans to transition existing CoWoS-S capacity to CoWoS-L. This change will impact TSMC’s supply chain but is seen as a step forward in Nvidia’s push to meet the growing demand for its AI chips.

Huang also noted that while packaging capacity for these advanced chips had previously been a bottleneck, it had expanded significantly in recent years, with available capacity now approximately four times greater than it was two years ago. Despite the increased demand, Nvidia has not been cutting orders but is instead increasing its reliance on CoWoS-L, which is expected to better meet the needs of Blackwell’s design.

The move to CoWoS-L technology and changes in Nvidia’s order patterns have sparked speculation about the potential impact on TSMC’s revenue, particularly with analysts like Ming-Chi Kuo noting the shift in Nvidia’s focus. Huang declined to comment on recent U.S. export restrictions that limit AI chip sales to countries outside a select group of U.S. allies, but the company’s strategies continue to evolve in response to market demands and geopolitical factors.

 

Apple Faces Potential Delay for 2nm Chipsets in iPhone 17 Pro Due to TSMC’s Wafer Yield Challenges

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“Apple’s 2nm Chipset Plans for iPhone 17 Pro May Face Delays as TSMC Struggles with Wafer Yield Issues”

Apple’s anticipated use of 2nm chipsets for its iPhone 17 Pro models may not come to fruition as originally planned. A recent report indicates that the company could be forced to delay this milestone by as much as 12 months due to ongoing wafer yield challenges faced by TSMC, its exclusive chip supplier. These setbacks have led to delays in the certification process for mass production of the 2nm chips, pushing the expected application process for the new technology potentially to 2026.

The report highlights that, while Apple had previously planned to enter mass production of the advanced 2nm chips for its upcoming iPhone 17 or iPhone 18 series, it has yet to commence the production phase. TSMC, the world’s leading chipmaker and Apple’s primary supplier for both iPhone and Mac processors, remains ahead of its competitors, including Samsung Electronics, in customer acquisition and yield performance. Despite its leadership in the market, however, TSMC is still encountering significant challenges with wafer yield, which is essential for ensuring the reliability and performance of the chips.

Further complicating the situation is the increasing demand for testing as the 2nm process remains in its developmental phase. The cost for customers looking to test these chips is reportedly rising, reflecting the difficulty in achieving stable production. In response to these challenges, TSMC is reportedly investing in expanding its facilities, with plans to ramp up production to around 130,000 units by 2026. This includes investments in its Arizona facility to boost global productivity, with an additional 20,000 units expected to be produced, bringing the total capacity to 140,000 units worldwide.

While the delay may shift Apple’s timeline for the iPhone 17 Pro, the company’s long-term vision for integrating 2nm chips remains intact. The advancements promised by these chips, such as improved performance and energy efficiency, are likely to be key selling points for future Apple devices. However, the delay underscores the complexities and high stakes involved in pushing the boundaries of semiconductor technology.