Taiwan Semiconductor Manufacturing Co achieved record quarterly profit on Thursday and anticipates strong revenue growth in the first quarter of the year due to increased demand for AI processing chips.
Although experiencing a prosperous business phase, TSMC may encounter challenges from U.S. government restrictions on technology to China, including potential impacts from the Biden administration's plans to tighten controls and export of AI chips and technology.
TSMC's CEO, C.C. Wei, expressed confidence in managing the issue, noting that the company is seeking special permits for affected clients and is positive about obtaining them. While maintaining an optimistic outlook on AI chip demand, Wei emphasized transparent communication with both current and future U.S. administrations without divulging specifics.
The world's largest contract chipmaker, with clients like Apple and Nvidia, reported a 57% surge in net income for the quarter ended Dec. 31, reaching a record high of T$374.68 billion ($11.4 billion). TSMC projects a revenue growth of about 37% in the current quarter and similarly robust performance for the full fiscal year 2025.
As part of its expansion plans, TSMC is proceeding as scheduled with construction of new fabs in the U.S., Japan, Germany, and Taiwan. The company foresees capital spending for the year ranging between $38 billion and $42 billion, reflecting an increase of up to 41%.
The rise in AI demand has significantly boosted TSMC's stock value, with shares in the company soaring 81% in the past year, outpacing the broader market's growth of 28.5%. The stock closed up 3.8% on Thursday in anticipation of the earnings call.