TSMC Q4 profit set for big leap on strong demand for AI chips

By Yimou Lee, Ben Blanchard and Faith Hung

TAIPEI (Reuters) -Taiwan Semiconductor Manufacturing Co logged record quarterly profit on Thursday and said it expects robust revenue growth in the first three months of the year as demand surges for chips used in artificial intelligence processing.

While business is booming, TSMC does face headwinds from U.S. government technology restrictions on China with the Biden administration saying this week it would further restrict AI chip and technology exports.

Though Taiwan and other close U.S. allies will be allowed unlimited access to U.S. AI technology, further curbs could impact demand from clients.

President-elect Donald Trump's incoming administration, which has threatened broad import tariffs, also brings much uncertainty.

TSMC Chief Executive C.C Wei said he believes that U.S. export controls on AI chips for China were a manageable issue for the company.

Wei said TSMC is currently applying for special permits for clients who might be subject to the curbs, adding he is confident that the premission will be granted. He did not elaborate.

Asked about TSMC's discussions with the current and next U.S. administrations, he added: "Let me assure you that we have a very frank and open communication with the current government and the future one also". He did not give details.

The world's largest contract chipmaker, whose customers include Apple and Nvidia, posted a 57% jump in net income to T$374.68 billion ($11.4 billion) for the quarter ended Dec. 31, a record high for any quarter and in line with estimates. Revenue climbed 39% from the same period a year earlier.

It expects similar revenue growth in the current quarter of about 37% to $25-25.8 billion, maintaining its bullish outlook for AI demand. For all of 2025, it expects revenue growth roughly midway between 20% and 30%.

TSMC, which is building new fabs in the United States, Japan, Germany and Taiwan, said it expects its capital spending for this year to be between $38 billion and $42 billion, an increase of as much as 41%.

Plans for all its overseas fabs are on track, it said.

The AI boom has helped drive up the price of shares in TSMC, Asia's most valuable company, with its Taipei-listed stock soaring 81% last year, compared with a 28.5% gain for the broader market.

The stock closed up 3.8% on Thursday ahead of the earnings call.

($1 = 33.0390 Taiwan dollars)

(Reporting by Yimou Lee, Ben Blanchard and Faith Hung; Editing by Edwina Gibbs)