TSMC is expected to report a 58 percent increase in fourth-quarter profit on Thursday, spurred by rising demand for AI chips.
The world’s largest contract manufacturer of chips benefited from the AI hype. But the Taiwanese company is also facing headwinds from U.S. technology restrictions on China and uncertainty over President-elect Donald Trump’s upcoming administration, which is threatening import tariffs. The development was reported by Reuters.
TSMC is expected to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ended Dec. 31, according to an LSEG SmartEstimate based on 22 analysts. SmartEstimates give more weight to analyst forecasts. This estimate is compared with net profit of T$238.7 billion for the fourth quarter of 2023.
TSMC reported a jump in quarterly revenue in Taiwanese dollars last week, far exceeding market expectations. The company will give its revenue forecast in U.S. dollars at a meeting later this week.
Good relationship with Trump administration
Brett Simpson, co-founder and senior analyst at Arete Research, said 2025 will be another year when AI customers largely drive TSMC’s growth. He is optimistic that TSMC can possibly build a good relationship with the new government.
Indeed, TSMC is spending billions of dollars on new factories abroad, including $65 billion on three factories in the U.S. state of Arizona. However, the bulk of production will remain in Taiwan.
More investment in 2025
During its earnings report, TSMC will update its outlook for the current quarter and full year, including planned capital investments. During reports in October, TSMC said capital expenditures in 2025 are likely to be higher than last year, although it did not give an exact figure. At that time, the company forecasted capital investment for 2024 of just over $30 billion.
The AI boom has helped boost the share price of Asia’s most valuable company, with TSMC’s stock listed on the Taipei Stock Exchange rising 81 percent last year, compared with a 28.5 percent gain for the broader market.