By Yimou Lee, Ben Blanchard and Faith Hung
TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co reported record quarterly profit on Thursday and anticipates strong revenue growth in the first quarter of the year due to the increasing demand for chips used in artificial intelligence processing.
Despite the thriving business, TSMC is facing challenges from U.S. government technology restrictions on China, with the Biden administration announcing further limitations on AI chip and technology exports this week.
While Taiwan and other close U.S. allies will have unrestricted access to U.S. AI technology, additional constraints could impact demand from clients.
The incoming administration of President-elect Donald Trump, which has hinted at imposing broad import tariffs, adds a layer of uncertainty.
TSMC’s CEO, C.C. Wei, expressed confidence that the company can manage U.S. export controls on AI chips for China. He mentioned that TSMC is in the process of applying for special permits for clients who may be affected by the restrictions, and he believes that the permits will be granted.
On the topic of discussions with the current and future U.S. administrations, Wei stated, “Let me assure you that we have a very frank and open communication with the current government and the future one also,” without providing further details.
The world’s leading contract chipmaker, serving clients like Apple and Nvidia, reported a 57% increase in net income to T$374.68 billion ($11.4 billion) for the quarter ending on December 31, marking a record high for any quarter and aligning with expectations. Revenue also rose by 39% compared to the same period last year.
In the ongoing quarter, TSMC foresees similar revenue growth of about 37% to $25-25.8 billion, maintaining its optimistic outlook for AI demand. For the whole of 2025, it predicts revenue growth to be approximately midway between 20% and 30%.
TSMC, currently constructing new fabs in the United States, Japan, Germany, and Taiwan, expects its capital spending for this year to range between $38 billion and $42 billion, representing a potential 41% increase.
The company assured that plans for all its overseas fabs are progressing as planned.
The surge in AI technology has contributed to the rise in TSMC’s stock price, making it Asia’s most valuable company. Its stock listed in Taipei soared by 81% last year, outpacing the broader market’s 28.5% gain.
The stock closed 3.8% higher on Thursday before the earnings call.
($1 = 33.0390 Taiwan dollars)