TSMC to Report 58% Surge in Q4 Profit Amid AI Demand Boom

Taiwan Semiconductor Manufacturing Co. (TSMC), the leading global producer of advanced chips powering artificial intelligence (AI) applications, is expected to announce a 58% jump in fourth-quarter profit. Analysts estimate TSMC's net profit for Q4 at T$377.95 billion ($11.41 billion), up from T$238.7 billion a year earlier, driven by surging AI demand.

TSMC, whose major clients include Apple and Nvidia, has benefited from the growing adoption of AI technologies. The company recently reported a significant increase in Q4 revenue, surpassing market expectations. On Thursday, it will reveal its revenue outlook in U.S. dollars during its earnings call.

Despite its strong performance, TSMC faces challenges, including U.S. technology export restrictions on China and uncertainty over potential tariffs under the incoming Trump administration. However, Arete Research analyst Brett Simpson noted that TSMC’s investment in Arizona—a $65 billion commitment to three factories—positions it favorably as the largest foreign direct investment project in the U.S. This could strengthen its relationship with the administration.

Chairman Edward Chen of Fubon Financial highlighted the importance of progress on TSMC's Arizona fab, particularly yield rates, for the company’s future performance. Meanwhile, TSMC plans to increase its capital expenditure in 2024 to over $30 billion, with expectations of even higher spending in 2025 to meet rising AI-related demand.

Last year, TSMC’s stock soared 81%, outperforming the broader market's 28.5% gain. The AI-driven boom continues to elevate Asia's most valuable company as it races to expand production capabilities.