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.