Taiwan’s TSMC Sees Profit Soar 57% Amid AI Boom
Strong Earnings Defy Trade Tensions
Taiwan Semiconductor Manufacturing Corp. (TSMC), the world’s largest semiconductor manufacturer, has reported a staggering 57% increase in profit for the last quarter, driven by the rapid growth of artificial intelligence (AI). The company’s net profit reached 374.7 billion new Taiwan dollars ($11.4 billion), exceeding expectations.
Revenue Surges 34% to $88 Billion
Last week, TSMC announced that its revenue for 2024 had jumped almost 34% to 2.9 trillion new Taiwan dollars ($88 billion). The company’s revenue for the fourth quarter also saw a significant increase of 38.8% to 868.46 billion new Taiwan dollars ($26.4 billion), beating forecasts.
Navigating U.S.-China Trade Tensions
Despite the impressive earnings, TSMC faces challenges in the midst of escalating U.S.-China trade tensions. The U.S. government has introduced new regulations to restrict exports of AI chips and other advanced technology, aiming to limit China’s access. While Taiwan is exempt from these restrictions, the new rules may impact demand for AI chips from chipmakers like TSMC.
Expansion Plans in the U.S. and Japan
To mitigate these risks, TSMC is pushing forward with plans to open three factories in the U.S. and two more in Japan. The Japanese and U.S. governments are offering substantial funding and subsidies to support domestic chip production, totaling billions of dollars.
A Strategic Move to Diversify
By expanding its production capacity in the U.S. and Japan, TSMC is strategically diversifying its operations to reduce dependence on any single market. This move is expected to help the company navigate the complex landscape of trade tensions and technological competition.
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