TSMC’s Q4 Profit Expected to Surge 58% on Robust AI Chip Demand

TSMC’s Q4 Profit Expected to Surge 58% on Robust AI Chip Demand

TSMC Set to Report 58% Increase in Q4 Profit on strong AI chip demand

Taiwan Semiconductor Manufacturing Company (TSMC) is expected to announce a substantial leap in fourth-quarter profits, driven by growing demand for advanced chips used in artificial intelligence applications.

Expected Profit Growth

TSMC’s net profit for the fourth quarter is projected to reach T$377.95 billion ($11.41 billion), a 58% increase from T$238.7 billion in the same quarter last year. This growth reflects the rising importance of AI in driving global demand for cutting-edge semiconductors.

AI Demand Boosts Revenue

The AI boom has significantly benefited TSMC, whose advanced chips are crucial for powering AI technologies. This trend has contributed to an 81% increase in TSMC’s stock value in 2024, outpacing the broader market’s 28.5% rise.

Challenges from U.S. Policies

Despite its strong growth, TSMC faces challenges due to U.S. government technology restrictions on China and uncertainty about potential tariffs. These factors could impact future demand and production strategies.

Focus on U.S. Expansion

TSMC is investing heavily in overseas facilities, including a $65 billion project to build three factories in Arizona. Progress on these fabs, particularly in achieving high chip yield rates, is critical for the company.

Capital Expenditure Outlook

In its upcoming earnings call, TSMC will update its guidance for the current quarter and provide full-year projections, including capital expenditure plans. The company has indicated that 2024 capital expenditure will slightly exceed $30 billion, with expectations for even higher spending in 2025.

Strategic Growth in AI

Analysts believe that AI-related growth will continue to be a major driver for TSMC in the coming years. Industry experts are optimistic about the company’s ability to navigate challenges while capitalizing on the AI megatrend.

Revenue Update Coming Soon

TSMC, which recently reported stronger-than-expected fourth-quarter revenue in Taiwan dollars, will present its official revenue outlook in U.S. dollars during its earnings call.