Taiwan Semiconductor Manufacturing Co (TSMC) is expected to report a 58% surge in fourth-quarter profit due to surging demand for its advanced chips used in artificial intelligence applications. The company, the world’s largest contract chipmaker, has benefited from the megatrend towards AI and has customers such as Apple and Nvidia. However, TSMC faces headwinds from U.S. government technology restrictions on China and uncertainty about President-elect Donald Trump’s incoming administration, which has threatened broad import tariffs.
TSMC is set to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ended December 31, according to a LSEG SmartEstimate drawn from 22 analysts. The company last week reported a jump in fourth-quarter revenue in Taiwan dollars, comfortably beating market expectations.
Brett Simpson, co-founder and senior analyst of Arete Research, said 2025 will be another year where TSMC’s growth is largely driven by AI customers. He also expressed optimism that TSMC can build a good relationship with the new administration, particularly given its new fab cluster in Arizona, which is the biggest foreign direct investment project in the U.S. at present.
Edward Chen, chairman of Fubon Financial’s securities investment unit, said progress on the Arizona fab and its yield rates, or the percentage of usable chips, would be crucial for the company. He also noted that the impact of tariffs to be imposed by the incoming Trump administration on demand remains to be seen.
TSMC will update its outlook for the current quarter as well as for the full year, including planned capital expenditure, on its earnings call on Thursday. The company is expected to spend billions of dollars on new factories overseas, including $65 billion on three plants in Arizona, though it says most manufacturing will remain in Taiwan.