TAIPEI: Taiwan Semiconductor Manufacturing Co (2330.TW) reported a record quarterly profit on Thursday and indicated it anticipates strong revenue growth in the first quarter of the year due to rising demand for chips used in artificial intelligence processing. Despite the thriving business, TSMC encounters challenges from U.S. governmental tech limitations on China, with the Biden administration stating this week it will impose stricter AI chip and technology export rules. While Taiwan and other close U.S. allies will have unrestricted access to U.S. AI technology, additional restrictions could affect demand from customers. President-elect Donald Trump's upcoming administration, which has proposed significant import tariffs, also introduces considerable uncertainty.
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TSMC reports record profit, projects AI-driven growth.
TSMC CEO C.C. Wei stated that he thinks U.S. export restrictions on AI chips to China were a manageable challenge for the firm. Wei mentioned that TSMC is in the process of obtaining special permits for clients potentially affected by the restrictions, expressing confidence that the permission will be approved. He did not provide more details. In response to a question regarding TSMC's talks with the present and upcoming U.S. administrations, he stated: "I want to assure you that we maintain very candid and transparent communication with both the current and the future government." He did not provide specifics.
TSMC Posts Record Quarterly Profit and Projects Robust AI-Driven Growth for 2025
The largest contract chip manufacturer globally, serving clients like Apple (AAPL.O), opens a new tab and Nvidia (NVDA.O), opens a new tab, experienced a 57 per cent increase in net income to T$374.68 billion ($11.4 billion) for the quarter that ended on Dec. 31, marking an all-time high for any quarter and matching expectations. Revenue increased by 39 per cent compared to the same timeframe last year. It anticipates comparable revenue growth this quarter of approximately 37 per cent to $25-25.8 billion, sustaining its optimistic perspective on AI demand. Moreover, it anticipates revenue growth to be approximately between 20 and 30 per cent for the entirety of 2025.
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TSMC, constructing new fabs in the United States, Japan, Germany, and Taiwan, stated that it anticipates its capital expenditure for this year to range from $38 billion to $42 billion, an increase of up to 41 per cent. It stated that plans for all its international fabs are progressing as scheduled. The surge in AI has contributed to the increase in stock prices for TSMC, the most valuable company in Asia, with its shares listed in Taipei jumping 81 per cent last year, while the overall market (.TWII) saw a 28.5 per cent rise. The stock finished with a 3.8 per cent increase on Thursday before the earnings call.
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