Taiwan Semiconductor Manufacturing Co. (TSMC) reported record quarterly profits and projected robust revenue growth for the first quarter of 2025, driven by surging demand for chips used in artificial intelligence (AI) processing. The company, a key supplier to tech giants like Apple and Nvidia, saw its net income soar 57% to T$374.68 billion (US$11.4 billion) for the quarter ending December 31st. This marks a record high for any quarter and aligns with market expectations. TSMC's revenue for the quarter increased by 39% year-over-year, and the company anticipates a similar growth rate of 37% in the current quarter. Additionally, TSMC announced plans to increase its capital expenditure for the year to between US$38 billion and US$42 billion, reflecting a potential rise of up to 41%, underscoring its confidence in sustained AI demand.
Despite the positive outlook, TSMC faces challenges from the US government's technology restrictions on China and uncertainties surrounding the incoming administration of president-elect Donald Trump, which has hinted at imposing broad import tariffs. The US government recently announced further restrictions on AI chip and technology exports, which could pose additional hurdles for TSMC. However, Taiwan and other close US allies are expected to retain unrestricted access to US AI technology, potentially mitigating some of these challenges.
TSMC shares are trading at 215.25, up 4.09% from the previous close of 206.8 on January 15th.