By Wen-Yee Lee and Faith Hung
TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co, the world’s top maker of advanced chips used in artificial intelligence applications, is expected to report a 58% jump in fourth-quarter profit on Thursday on strong demand.
The world’s largest contract chip maker, whose customers include Apple (NASDAQ: ) and Nvidia (NASDAQ: ), has profited from the megatrend toward artificial intelligence. But the Taiwanese company faces problems due to the US government’s technology restrictions on China and uncertainty over the new administration of President-elect Donald Trump, which has threatened broad import tariffs.
TSMC is expected to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ended Dec. 31, according to LSEG SmartEstimate compiled by 22 analysts. SmartEstimates gives more weight to analyst forecasts that are more consistently accurate.
That estimate compares with Q4 2023 net profit of T$238.7 billion.
TSMC last week reported a jump in fourth-quarter revenue in Taiwan dollars, comfortably beating market expectations. The company provides its revenue outlook in US dollars in its quarterly earnings report, scheduled for Thursday at 06:00 GMT.
Arete Research co-founder and senior analyst Brett Simpson said 2025 will be another year where TSMC’s growth will be largely driven by AI customers.
“From a US government perspective, Arete is optimistic that TSMC can build a good relationship with the new administration, especially given that its new factory cluster in Arizona is currently the largest foreign direct investment project in the US,” he added.
TSMC is spending billions of dollars on new factories overseas, including $65 billion on three factories in the US state of Arizona, although it says most production will remain in Taiwan.
Edward Chen, president of Fubon Financial’s securities investment division, said progress at the Arizona plant and its yield rates, or the percentage of usable chips, will be key for the company.
“Additionally, the impact of tariffs imposed by the new Trump administration on demand remains to be seen,” he added.
TSMC, on its earnings call, will update its outlook for the current quarter as well as the full year, including planned capital expenditures as it chases production expansion.
On its last earnings call in October, TSMC said capital spending was likely to be higher in 2025 than last year, though it did not provide a figure.
In the call, he predicted that capital expenditures for 2024 will be slightly higher than 30 billion dollars.
The artificial intelligence boom has helped lift the share price of Asia’s most valuable company, with Taipei-listed TSMC shares jumping 81% in the past year, compared with a 28.5% gain for the broader market.
(1 USD = 33.1280 Taiwan dollars)
