Taiwan Semiconductor Manufacturing Co. (TSMC) has projected a robust capital expenditure plan for 2025, significantly surpassing analysts' expectations and fueling optimism about the company's growth prospects. During its earnings call on January 16th, TSMC announced that it anticipates capital expenditures for 2025 to be between USD 38 billion and USD 42 billion. This substantial investment is primarily driven by the increasing demand for 5G, artificial intelligence (AI), and high-performance computing (HPC) technologies. The company plans to allocate 70% of this budget to advanced process development, with the remainder directed towards specialty technology and packaging, testing, and other areas.
The announcement has sparked a positive reaction in the market, particularly among US chip equipment companies, which are expected to benefit from TSMC's increased spending. The company's optimistic outlook for 2025, coupled with its record-high performance in 2024, has bolstered investor confidence. TSMC's chairman, C.C. Wei, highlighted the company's strategic focus on capitalizing on the AI boom and its commitment to maintaining a steady gross margin of 57-59% in the first quarter of 2025.
TSMC shares have risen by 5.17% to 217.5 as of 6:20 am on January 16th, up from the previous close of 206.8.