Taiwan Semiconductor Manufacturing Co. Sees Record Profit Amid AI Boom
Surging Demand for AI Chips Drives Growth
Taiwan Semiconductor Manufacturing Co. (TSMC) has reported a record quarterly profit, driven by surging demand for chips used in artificial intelligence processing. The company’s shares jumped 3.8% in Taiwan and 1.3% in pre-market trading in the US, reflecting investor confidence in its growth prospects.
Robust Revenue Growth Expected
TSMC expects revenue to grow by around 37% in the current quarter, reaching $25-25.8 billion. This bullish outlook is fueled by the increasing adoption of AI technology across various industries. For the full year 2025, the company anticipates revenue growth of around 20-30%.
US Government Restrictions Pose Challenges
While TSMC’s business is booming, the company faces headwinds from US government technology restrictions on China. The Biden administration’s decision to further restrict AI chip and technology exports could impact demand from clients. However, Taiwan and other close US allies will be allowed unlimited access to US AI technology, mitigating the impact of these restrictions.
TSMC Confident in Managing Export Controls
TSMC’s Chief Executive, C.C. Wei, expressed confidence in the company’s ability to manage the US export controls on AI chips for China. The company is currently applying for special permits for clients who might be subject to the curbs, and Wei believes that these permits will be granted.
Open Communication with US Administrations
Wei emphasized that TSMC has a very frank and open communication with both the current and future US administrations. While he did not provide details, this suggests that the company is well-positioned to navigate any potential challenges arising from the changing regulatory landscape.
Record Net Income and Revenue Growth
TSMC posted a 57% jump in net income to T$374.68 billion ($11.4 billion) for the quarter ended December 31, a record high for any quarter. Revenue climbed 39% from the same period a year earlier, driven by strong demand for its chips.
Capital Spending to Increase
The company plans to increase its capital spending to between $38 billion and $42 billion this year, an increase of up to 41%. This investment will support the construction of new fabs in the US, Japan, Germany, and Taiwan, further expanding TSMC’s production capacity.
AI Boom Drives Share Price Growth
The AI boom has driven up the price of TSMC’s shares, making it Asia’s most valuable company. The company’s Taipei-listed stock soared 81% last year, outperforming the broader market.
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