Taiwan Semiconductor Manufacturing Co., the leading global producer of advanced chips for artificial intelligence, is expected to report a 58% increase in fourth-quarter profit on Thursday due to rising demand.
The world’s largest contract chipmaker, with clients including Apple and Nvidia, has capitalized on the AI boom.
However, TSMC faces challenges from U.S. government technology restrictions on China and uncertainties surrounding President-elect Donald Trump’s administration, which has threatened widespread import tariffs, according to Reuters.
TSMC is expected to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ending December 31, according to an LSEG SmartEstimate based on 22 analysts.
This estimate is a significant increase compared to the fourth-quarter net profit of T$238.7 billion in 2023.
SmartEstimates prioritize forecasts from analysts with a track record of accuracy.
TSMC reported a significant increase in fourth-quarter revenue in Taiwan dollars last week, surpassing market expectations.
The company will provide its revenue outlook in U.S. dollars during its quarterly earnings call, scheduled for 0600 GMT on Thursday.
The co-founder and senior analyst at Arete Research, Brett Simpson, stated that 2025 will be another year where TSMC’s growth is primarily driven by AI customers.
“From the U.S. government perspective, Arete is optimistic that TSMC can build a good relationship with the new administration particularly given its new fab cluster in Arizona is the biggest foreign direct investment project in the U.S. at present,” he added.
TSMC is investing billions of dollars in new overseas factories, including $65 billion for three plants in Arizona, U.S. However, the company has stated that the majority of its manufacturing will remain in Taiwan.
The chairman of Fubon Financial’s securities investment unit, Edward Chen, stated that the progress of the Arizona fab and its yield rates—the percentage of usable chips—will be crucial for TSMC’s success.
“Additionally, the impact of tariffs to be imposed by the incoming Trump administration on demand remains to be seen,” he added.
During its earnings call, TSMC will update its outlook for the current quarter and the full year, including planned capital expenditures as it works to expand production.
