TSMC Reports Record Q4 Profit Amid AI Chip Boom, Faces Geopolitical Challenges

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

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co, the main global producer of advanced chips used in artificial intelligence applications, is expected to report a 58% leap in fourth-quarter profit on Thursday because of surging demand. The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from the megatrend towards AI. But the Taiwanese company faces headwinds from U.S. government technology restrictions on China and uncertainty about President-elect Donald Trump's incoming administration, which has threatened broad import tariffs. The U.S. government said on Monday it would further restrict AI chip and technology exports, adding to potential issues TSMC could face, though Taiwan and other close U.S. allies will be allowed unlimited access to U.S. AI technology. TSMC is set to report a net profit of T$377.95 billion ($11.44 billion) for the quarter ended Dec. 31, according to a LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 fourth-quarter net profit of T$238.7 billion. TSMC last week reported a jump in fourth-quarter revenue in Taiwan dollars, comfortably beating market expectations. The company gives its revenue outlook in U.S. dollars on its quarterly earnings call, scheduled for 0600 GMT on Thursday. TSMC is spending billions of dollars on new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. TSMC, at its earnings call, will update its outlook for the current quarter as well as for the full year, including planned capital expenditure as it races to expand production. On its last earnings call in October, TSMC said capital expenditure was likely to be higher in 2025 than last year, though it did not provide a figure. On that call, it predicted 2024 capital expenditure as being slightly higher than $30 billion. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock soaring 81% last year, compared with a 28.5% gain for the broader market. (Reporting by Ben Blanchard; Editing by Lincoln Feast.)

TSMC fourth-quarter profit seen jumping 58% on strong AI chip demand

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co, the main global producer of advanced chips used in artificial intelligence applications, is expected to report a 58% leap in fourth-quarter profit on Thursday because of surging demand. The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from the megatrend towards AI. But the Taiwanese company faces headwinds from U.S. government technology restrictions on China and uncertainty about President-elect Donald Trump's incoming administration, which has threatened broad import tariffs. TSMC is set to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ended Dec. 31, according to a LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 fourth-quarter net profit of T$238.7 billion. TSMC last week reported a jump in fourth-quarter revenue in Taiwan dollars, comfortably beating market expectations. The company gives its revenue outlook in U.S. dollars on its quarterly earnings call, scheduled for 0600 GMT on Thursday. Brett Simpson, Arete Research co-founder and senior analyst, said 2025 will be another year where TSMC's growth is largely driven by AI customers. "From the U.S. government perspective, Arete is optimistic that TSMC can build a good relationship with the new administration particularly given its new fab cluster in Arizona is the biggest foreign direct investment project in the U.S. at present," he added. TSMC is spending billions of dollars on new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. Edward Chen, chairman of Fubon Financial's securities investment unit, said progress on the Arizona fab and its yield rates, or the percentage of usable chips, would be crucial for the company. "Additionally, the impact of tariffs to be imposed by the incoming Trump administration on demand remains to be seen," he added. TSMC, at its earnings call, will update its outlook for the current quarter as well as for the full year, including planned capital expenditure as it races to expand production. On its last earnings call in October, TSMC said capital expenditure was likely to be higher in 2025 than last year, though it did not provide a figure. On the call, it predicted 2024 capital expenditure as being slightly higher than $30 billion. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock soaring 81% last year, compared with a 28.5% gain for the broader market. (Reporting by Lee Wen-Yee and Faith Hung; Additional reporting by Ben Blanchard; Editing by Jamie Freed)

Taiwanese Chipmaker TSMC Posts 57% Surge in Profit Thanks to the AI Boom

HONG KONG (AP) -- Taiwan computer chip maker TSMC reported Thursday that its profit in the last quarter rose 57%, buoyed by the artificial intelligence boom. The world's biggest semiconductor manufacturer reported a net profit of 374.7 billion new Taiwan dollars ($11.4 billion), higher than expected. Last week, the company, Taiwan Semiconductor Manufacturing Corp., reported that its revenue for 2024 rose almost 34% to 2.9 trillion new Taiwan dollars ($88 billion). Revenue for the fourth quarter rose 38.8% to 868.46 billion new Taiwan dollars ($26.4 billion), also higher than forecasts. TSMC has been caught in the crossfire of U.S.-China tensions over trade and technology. The U.S. said this week that it would further restrict exports of chips used for AI and other advanced technology, seeking to limit China's access. The new rules cap the number of AI chips that can be exported to most countries, although about 20 close allies including Taiwan will have unlimited access to U.S. AI technology. The regulations however could impact demand for AI chips from chipmakers like TSMC. The Taiwanese chipmaker has plans to open three factories in the U.S. and two more in Japan. Both the Japanese and U.S. governments are offering billions in funding and subsidies to TSMC to boost domestic chip production. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

TSMC logs record quarterly profit, sees hefty revenue growth in early 2025

STORY: TSMC logged record quarterly profit on Thursday (Jan.16). With demand surging for chips used in artificial intelligence processing. While business is booming, TSMC does face headwinds from U.S. government technology restrictions on China. And President Biden's administration this week said 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's Chief Executive said on Thursday that he believes U.S. export controls on AI chips for China were a manageable issue for the company. The world's largest contract chipmaker, whose customers include Apple and Nvidia, posted a 57% jump in net income to $11.4 billion for the quarter ending December 31st. That was 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 between $25-25.8 billion. TSCMC says it maintains its bullish outlook for AI demand.

Taiwanese chipmaker TSMC posts 57% surge in profit thanks to the AI boom

HONG KONG (AP) -- Taiwan computer chip maker TSMC reported Thursday that its profit in the last quarter rose 57%, buoyed by the artificial intelligence boom. The world's biggest semiconductor manufacturer reported a net profit of 374.7 billion new Taiwan dollars ($11.4 billion), higher than expected. Last week, the company, Taiwan Semiconductor Manufacturing Corp., reported that its revenue for 2024 rose almost 34% to 2.9 trillion new Taiwan dollars ($88 billion). Revenue for the fourth quarter rose 38.8% to 868.46 billion new Taiwan dollars ($26.4 billion), also higher than forecasts. TSMC has been caught in the crossfire of U.S.-China tensions over trade and technology. The U.S. said this week that it would further restrict exports of chips used for AI and other advanced technology, seeking to limit China's access. The new rules cap the number of AI chips that can be exported to most countries, although about 20 close allies including Taiwan will have unlimited access to U.S. AI technology. The regulations however could impact demand for AI chips from chipmakers like TSMC.

Taiwanese chipmaker TSMC posts 57% surge in profit thanks to the AI boom

HONG KONG -- Taiwan computer chip maker TSMC reported Thursday that its profit in the last quarter rose 57%, buoyed by the artificial intelligence boom. The world's biggest semiconductor manufacturer reported a net profit of 374.7 billion new Taiwan dollars ($11.4 billion), higher than expected. Last week, the company, Taiwan Semiconductor Manufacturing Corp., reported that its revenue for 2024 rose almost 34% to 2.9 trillion new Taiwan dollars ($88 billion). Revenue for the fourth quarter rose 38.8% to 868.46 billion new Taiwan dollars ($26.4 billion), also higher than forecasts. TSMC has been caught in the crossfire of U.S.-China tensions over trade and technology. The U.S. said this week that it would further restrict exports of chips used for AI and other advanced technology, seeking to limit China's access. The new rules cap the number of AI chips that can be exported to most countries, although about 20 close allies including Taiwan will have unlimited access to U.S. AI technology. The regulations however could impact demand for AI chips from chipmakers like TSMC.

Taiwan Semiconductor Manufacturing Company's fourth-quarter profit seen jumping 58% on strong AI chip demand

Taiwan Semiconductor Manufacturing Company, the main global producer of advanced chips used in artificial intelligence applications, is expected to report a 58% leap in fourth-quarter profit on Thursday because of surging demand. The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from the megatrend towards AI. But the Taiwanese company faces headwinds from US government technology restrictions on China and uncertainty about President-elect Donald Trump's incoming administration, which has threatened broad import tariffs. TSMC is set to report a net profit of T$377.95 billion ($11.41 billion) for the quarter ended December 31, according to a LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 fourth-quarter net profit of T$238.7 billion. TSMC last week reported a jump in fourth-quarter revenue in Taiwan dollars, comfortably beating market expectations. The company gives its revenue outlook in U.S. dollars on its quarterly earnings call, scheduled for 0600 GMT on Thursday. Brett Simpson, Arete Research co-founder and senior analyst, said 2025 will be another year where TSMC's growth is largely driven by AI customers. "From the U.S. government perspective, Arete is optimistic that TSMC can build a good relationship with the new administration particularly given its new fab cluster in Arizona is the biggest foreign direct investment project in the U.S. at present," he added. TSMC is spending billions of dollars on new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. Edward Chen, chairman of Fubon Financial's securities investment unit, said progress on the Arizona fab and its yield rates, or the percentage of usable chips, would be crucial for the company. "Additionally, the impact of tariffs to be imposed by the incoming Trump administration on demand remains to be seen," he added. TSMC, at its earnings call, will update its outlook for the current quarter as well as for the full year, including planned capital expenditure as it races to expand production. On its last earnings call in October, TSMC said capital expenditure was likely to be higher in 2025 than last year, though it did not provide a figure. On the call, it predicted 2024 capital expenditure as being slightly higher than $30 billion. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock soaring 81% last year, compared with a 28.5% gain for the broader market.

Taiwan's TSMC says net profit rose 57% in fourth quarter

Taiwanese chipmaking giant TSMC on Thursday announced a better-than-expected net profit for the fourth quarter as it benefits from booming demand for AI technology. Taiwan Semiconductor Manufacturing Company is the world's largest contract maker of chips that are used in everything from Apple's iPhones to Nvidia's cutting-edge artificial intelligence hardware. The firm said net profit for the three months to December jumped 57 percent on-year to NT$374.7 billion (US$11.4 billion). That was better than the NT$369.8 billion forecast by analysts surveyed by Bloomberg News, and underscores expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon. Net revenue for the fourth quarter rose 38.8 percent to NT$868.46 billion, TMSC said, beating forecasts. For the full year, net profit reached NT$1.2 trillion, up 40.5 percent. The firm said last week that net revenue rose 33.9 percent to NT$2.9 trillion. "We expect 2025 to be another strong growth year for TSMC" as AI-related demand continues to surge, chairman and chief executive C.C. Wei told an earnings conference. TSMC's Taiwan shares surged 3.76 percent to close at NT$1,105 ahead of the announcement. The briefing was held as Nvidia boss Jensen Huang visited Taiwan where the government says the US chip giant plans to establish its Asia headquarters. TSMC's full year revenue was expected to increase "by close to mid-20s percent in US dollar terms", Wei said. Taiwan's largest company is at the forefront of the AI revolution but it has been grappling with geopolitical tensions between Beijing and Washington over technology, trade and Taiwan. The United States this week tightened controls on high-end chip exports as it seeks to curb the flow of the advanced technology to China. Wei said the company was still analyzing the potential impact from the US restrictions, but it appeared "manageable". He added that TSMC would apply for "special permits" for customers and the company was confident that those not involved in AI would get "some permission". TSMC has been under pressure to move more of its production away from Taiwan, where the bulk of its fabrication plants are located. While Taiwan is a self-ruled island, China claims it as part of its territory and has threatened to use force to bring it under its control. TSMC's new factories overseas include three planned in the United States and one that opened in Japan last year. It is also moving into Europe. The United States will award TSMC up to US$6.6 billion in direct funding to help build "state-of-the-art facilities in Arizona", officials said in November, finalizing the deal before Donald Trump enters the White House. The funding is part of efforts to revive US manufacturing and secure the country's access to chips. "Let me assure you that we have a very frank and open communication with the current (US) government and with the future one also," Wei said. TSMC's expansion overseas drove a surge in Taiwanese foreign direct investment in 2024, Bloomberg reported, citing figures from the Economic Ministry. Bloomberg said the data showed a "decoupling" from China, with investment in Japan and the United States by Taiwanese companies hitting a record as investment in China stagnated.

Why TSMC's $11.4 billion profit boom is just the beginning

Taiwan Semiconductor Manufacturing Co (TSMC) is expected to report a 58% leap in fourth-quarter profit, driven by strong demand for artificial intelligence (AI) chips. The earnings report for the quarter ended December 31 is scheduled for release on Thursday. Analysts estimate that TSMC's net profit will reach T$377.95 billion (approximately $11.41 billion), up from T$238.7 billion in the same quarter for 2023, according to LSEG SmartEstimate from 22 analysts. TSMC's customers include major companies like Apple and Nvidia, who have contributed to the firm's growth amid the ongoing AI megatrend. Last week, TSMC reported a robust increase in its fourth-quarter revenue in Taiwan dollars, exceeding market expectations. During its upcoming quarterly earnings call, the company will provide its revenue outlook in U.S. dollars, scheduled for 0600 GMT on Thursday. Brett Simpson, co-founder and senior analyst at Arete Research, noted that TSMC's growth will largely continue to be driven by its AI customers in 2025. He expressed optimism regarding potential good relations with the incoming U.S. administration, particularly because TSMC's new fabrication plant cluster in Arizona represents the largest foreign direct investment project in the U.S. currently. 5 AI stocks to buy in January and hold for the long haul TSMC has been heavily investing in new factories, committing $65 billion to three plants in Arizona. However, the company has indicated that most of its manufacturing operations will remain in Taiwan. Edward Chen, chairman of Fubon Financial's securities investment unit, emphasized the importance of yield rates from the Arizona fab for the company's success. The impact of potential tariffs under the incoming Trump administration on demand for TSMC products is still undetermined. TSMC will provide updates on its outlook for the current quarter and the full year during its earnings call, as well as plans for capital expenditure. In its last earnings call in October, TSMC suggested that its capital expenditure for 2024 would be slightly higher than $30 billion and anticipated an increase for 2025 compared to last year. The AI boom has spurred significant growth in TSMC's share price, with stock trading in Taipei soaring by 81% last year, while the broader market gained 28.5% in the same period. TSMC also reported December revenue of NT$278.16 billion ($8.4 billion), marking an increase of 0.8% from November and a surge of 57.8% year-on-year. For the calendar year 2024, TSMC's total revenue was NT$2,894.31 billion ($87.4 billion), a growth of 33.9% compared to 2023. Analysts attribute this revenue increase primarily to the rising demand for AI hardware, which necessitates the advanced manufacturing capabilities of TSMC.

TSMC Expects Continued AI-Driven Growth After Ending 2024 Strong -- Update

Taiwan Semiconductor Manufacturing Co. reported another record quarter on AI-driven demand for chips and said it expects continued growth even as it navigates the U.S.-China technology rivalry. The world's largest contract chip maker said Thursday that fourth-quarter net profit jumped 57% to 374.68 billion New Taiwan dollars, equivalent to US$11.37 billion, topping analysts' expectations in a FactSet poll. Revenue rose 39% from a year earlier to NT$868.46 billion for the quarter, with the gross margin climbing to 59%. TSMC Chairman and Chief Executive C.C. Wei said revenue from AI-related servers and processors is expected to double in 2025 after more than tripling last year to account for 18% of its total revenue. Supported by the strong AI demand, the company guided for mid-20% growth in sales this year and said it expects first-quarter revenue of between US$25.0 billion and US$25.8 billion. Artificial intelligence will likely remain a long-term growth catalyst for TSMC, driven by the continued global investment in AI infrastructure. Deutsche Bank analyst Robert Sanders said in a recent note that the Taiwanese company's sales growth will be closely tied to Nvidia, which could account for 18% of TSMC's sales in 2025. TSMC in a postearnings call said it thinks the AI momentum has just begun and its long-term revenue compound annual growth rate could reach 20%, even on 2024's high base, as the technology becomes more widely deployed. Last year, shares in Taiwan-listed TSMC soared more than 80% on robust AI-related demand. The index heavyweight helped Taiwan become the best-performing major Asian market in 2024 with a 28% gain. TSMC has been expanding its footprint overseas, building facilities in Japan and the U.S. The company expects the overseas facilities ramp-up to dilute its gross margin, forecasting first-quarter margin at 57%-59%. The Taiwanese chip giant has also found itself in the crossfire of the U.S.-China chip war. Its technology was found in Huawei's AI chips last year, prompting the U.S. to roll out several new restrictions and now requiring chip makers that ship advanced semiconductors to China, including TSMC, to obtain licenses for transactions. Wei said Thursday that the current impact is "not significant" and "manageable," as it is working with clients to better handle the situation. Analysts at Citi, who commented before the license requirement, expected the recent curbs to have little impact on TSMC's AI chip demand, saying the chip maker's solid technology and execution should help it withstand potential order and share-price volatility in the near term.

TSMC Q4 profit beats expectations on robust AI demand By Investing.com

Investing.com-- Taiwan Semiconductor Manufacturing Co, also known as TSMC, clocked a stronger-than-expected fourth quarter profit on Thursday, as it continued to benefit from strong artificial intelligence-fueled demand for its advanced chips. TSMC's (TW:2330) (NYSE:TSM) net income surged 57% to T$374.68 billion ($11.60 billion) in the three months to Dec 31, the company said in a statement. The figure was higher than Bloomberg estimates of T$369.84 billion. Earnings per share were $2.24 for the quarter. This came on a revenue of T$868.46 billion, up nearly 39% from the same period last year. The jump was driven chiefly by increasing sales and market share of TSMC's advanced 3-nanometer chips. The company is the world's biggest contract chipmaker, and has benefited greatly from a surge in AI-fueled demand for advanced chips over the past two years. The company ranks tech giants such as NVIDIA Corporation (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL) among its biggest customers, and has benefited greatly from increased capital spending on AI infrastructure, particularly on data centers used to power AI programs. But the company could face some earnings pressure in the coming years, especially as the U.S. recently outlined even more restrictions on the export of advanced chip and AI technology into China. TSMC had come under increased scrutiny in late-2024 after a report showed that a shipment of its advanced chips had ended up with Chinese tech giant Huawei, which is blacklisted by the U.S.

TSMC fourth-quarter results top expectations, net profit surges 57% on robust AI chip demand

Taiwan Semiconductor Manufacturing Company's fourth-quarter revenue and profit beat expectations, as demand for advanced chips used in artificial intelligence applications continued to surge. Here are TSMC's fourth-quarter results versus LSEG consensus estimates: TSMC's revenue in the December quarter rose 38.8% from a year earlier, while net income rose 57%. The firm had forecast fourth-quarter revenue between $26.1 billion and $26.9 billion. TSMC, the world's largest contract chip manufacturer, produces advanced processors for clients such as Nvidia and Apple and has benefited from the megatrend in favor of AI. The company released its December revenue last week, bringing its annual total to NT$ 2.9 trillion -- a record-breaking year in sales since the company went public in 1994. In 2025, the company faces some headwinds from U.S. export controls on China and uncertainty surrounding the trade policy of President-elect Donald Trump, who has threatened to impose broad tariffs and has also accused Taiwan of "stealing" the U.S. chip business. Taiwan-listed shares of TSMC gained 81% in 2024 and were trading 3.75% higher on Thursday.

TSMC says net profit rose 57pc in Q4

TAIPEI (AFP) - Chipmaking giant TSMC on Thursday announced a better-than-expected net profit for the fourth quarter as it benefits from booming demand for AI technology. Taiwan Semiconductor Manufacturing Company is the world's largest contract maker of chips that are used in everything from Apple's iPhones to Nvidia's cutting-edge artificial intelligence hardware. The firm said net profit for the three months to December jumped 57 per cent on-year to TWD374.7 billion (USD11.4 billion). That was better than the TWD369.8 billion forecast by analysts surveyed by Bloomberg News, and underscores expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon. Net revenue for the fourth quarter rose 38.8 per cent to TWD868.46 billion, TMSC said, beating forecasts. TSMC said last week that net revenue rose 33.9 per cent to TWD2.9 trillion (USD87.8 billion) in 2024. Taiwan's largest company is at the forefront of the AI revolution but it has been grappling with geopolitical tensions between Beijing and Washington over technology, trade and Taiwan. The United States this week tightened controls on high-end chip exports as it seeks to curb the flow of the advanced technology to China. TSMC has been under pressure to move more of its production away from Taiwan, where the bulk of its fabrication plants are located.

Taiwanese chipmaker TSMC posts 57% surge in profits thanks to AI boom | BreakingNews.ie

Taiwan computer chip maker TSMC reported on Thursday that its profit in the last quarter rose 57%, buoyed by the artificial intelligence boom. The world's biggest semiconductor manufacturer reported a net profit of 374.7 billion new Taiwan dollars (£9.3 billion), higher than expected. Last week, the company, Taiwan Semiconductor Manufacturing Corp, reported that its revenue for 2024 rose almost 34% to 2.9 trillion new Taiwan dollars (£72 billion). Revenue for the fourth quarter rose 38.8% to 868.46 billion new Taiwan dollars (£21.6 billion), also higher than forecasts. TSMC has been caught in the crossfire of US-China tensions over trade and technology. The US said this week that it would further restrict exports of chips used for AI and other advanced technology, seeking to limit China's access. The new rules cap the number of AI chips that can be exported to most countries, although about 20 close allies including Taiwan will have unlimited access to US AI technology. The regulations, however, could affect demand for AI chips from chipmakers such as TSMC. The Taiwanese chipmaker has plans to open three factories in the US and two more in Japan. Both the Japanese and US governments are offering billions in funding and subsidies to TSMC to boost domestic chip production.

TSMC Posts Q4 Revenue Beating Estimates on AI Boom

TSMC also said its 2024 revenue came to NT$2.89 trillion, a 34% surge from 2023 numbers. Taiwan Semiconductor Manufacturing Co. (TSM) posted fourth-quarter revenue that beat Wall Street estimates and a 34% jump in 2024 sales, as the company keeps gaining from the artificial intelligence (AI) boom. Shares in the world's largest contract chip manufacturer are rising 1.25% in premarket trading Friday after the report. The company, which supplies tech heavyweights such as Apple (AAPL) and Nvidia (NVDA), posted total revenue for the December quarter at NT$868.46 billion ($26.35 billion), a calculation based on its announcement of December revenue of NT$278.16 billion. The quarterly figure beat the NT$854.82 billion consensus estimate of analysts polled by Visible Alpha. TSMC also said its 2024 revenue came to NT$2.89 trillion, a 34% surge from 2023 numbers. TSMC's numbers follow record fourth-quarter revenue posted by Foxconn, another Taiwanese firm, also on the back of robust demand for AI servers. Foxconn assembles Apple iPhones and Nvidia products, among other things.

TSMC Stock Jumps on Better-Than-Expected Q4 Profit, Bullish AI Outlook

Nisha Gopalan is the Senior Overnight Assignment Editor for Investopedia News. She is an award-winning financial journalist who has worked in London, where she is currently based, and Hong Kong. She previously worked at The Wall Street Journal and Bloomberg. U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose 4% in premarket trading Thursday after the world's largest contract chip manufacturer posted better-than-expected fourth-quarter profit and a bullish outlook for artificial intelligence (AI) demand. TSMC, which supplies tech heavyweights such as Apple (AAPL) and Nvidia (NVDA), posted profit of 374.68 billion New Taiwan dollars ($11.37 billion), a 57% year-over-year surge, or NT$14.45 ($0.44) per share. Analysts polled by Visible Alpha expected NT$369.15 billion, or NT$14.20 per share. The firm, which posted revenue of NT$868.46 billion, up 39% year-over-year, had indicated the top-line number last week when it disclosed its December monthly sales figures. TSMC also said then that its 2024 revenue came to NT$2.89 trillion, a 34% gain. "Our business in the fourth quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies," TSMC Chief Financial Officer (CFO) Wendell Huang said. "Moving into first quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand." TSMC Projects Q1 Revenue of $25B-$25.8B TSMC sees first-quarter 2025 revenue between $25.0 billion and $25.8 billion; gross profit margin between 57% and 59%; and operating profit margin between 46.5% and 48.5%. It also expects its 2025 capital budget to be between $38 billion and $42 billion.

TSMC Profit Beats Estimates After Year of Rapid AI-Driven Growth

Taiwan Semiconductor Manufacturing Co.'s profit in the December quarter topped estimates with a 57% rise, giving a boost to investors hoping to see the AI hardware spending spree extend into 2025. The world's biggest chipmaker reported net income of NT$374.7 billion ($11.4 billion) on Thursday. That compares with an average profit estimate of NT$369.8 billion, after the company disclosed better-than-projected sales last week.

TSMC Ended 2024 Strong With Another Record Quarter

Taiwan Semiconductor Manufacturing Co. ended 2024 on a strong note, reporting another record quarter as it continued to ride the artificial-intelligence wave while navigating the U.S.-China chip rivalry. The world's largest contract chip maker said Thursday that fourth-quarter net profit jumped 57% to 374.68 billion New Taiwan dollars, equivalent to US$11.37 billion. That exceeded the NT$370.64 billion consensus estimate of analysts in a FactSet poll. Revenue rose 39% from a year earlier to NT$868.46 billion for the quarter, taking the full-year figure to NT$2.894 trillion, up 34% from 2023, when it recorded a decline amid an inventory glut. TSMC's gross margin was 59%, in line with the company's guidance of 57%-59%. Despite continuing the sales momentum, the Taiwanese chip giant was again caught in the crossfire of the U.S-China chip war after its technology was found in Huawei's AI chips last year. In response, the U.S. has rolled out several new restrictions and now requires chip makers that ship advanced semiconductors to China, including TSMC, to obtain licenses for transactions. Analysts at Citi, who commented before the license requirement, expected the recent curbs to have little impact on TSMC's AI chip demand, saying the chip maker's solid technology and execution should help it withstand potential order and share-price volatility in the near term. Last year, shares in Taiwan-listed TSMC surged 81% on robust AI-related demand. The index heavyweight helped Taiwan become the best-performing major Asian market in 2024 with a 28% gain.

Chip giant TSMC says 2024 revenue rose 33.9 per cent

AFP - Chip making giant TSMC said yesterday its net sales rose by more than a third last year, beating its own forecast, as the company continued to benefit from soaring demand for artificial intelligence (AI) technology. The semiconductor manufacturing company controls more than half the world's output of chips used in everything from Apple's iPhones to Nvidia's cutting-edge AI hardware. Net revenue rose 33.9 per cent to USD87.8 billion, the company said in a statement, ahead of the release of its complete earnings report next week. The result exceeded its estimate in October for full-year revenue to increase by nearly 30 per cent, underscoring expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon. It comes after AI server maker Foxconn, also known by its official name Hon Hai Precision Industry, reported strong sales. TSMC is at the forefront of a generative AI revolution, churning out the world's most advanced microchips needed to power products made by Silicon Valley. Its shares have more than doubled since the AI boom began in late 2022 with the debut of OpenAI's ChatGPT, Bloomberg News reported. TSMC's new factories overseas include three planned in the US and one that opened in Japan last year. The US will award TSMC up to USD6.6 billion in direct funding to help build "state-of-the-art facilities in Arizona", officials said in November, finalising the deal before Donald Trump's administration enters the White House.

World's biggest chipmaker TSMC beats sales estimates as AI boost continues

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023. Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom. The world's largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year. That beat Refinitiv consensus estimates of 850.1 billion New Taiwan dollars. TSMC manufacturers semiconductors for some of the world's biggest companies, including Apple and Nvidia.

TSMC's Sales Beat Estimates in a Boost for AI's Outlook in 2025

Taiwan Semiconductor Manufacturing Co.'s quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of AI hardware spending will extend into 2025. The go-to chipmaker for Nvidia Corp. and Apple Inc. reported a 39% rise in October-December revenue to NT$868.5 billion ($26.3 billion), based on calculations off monthly disclosures. That compares with an average estimate of NT$854.7 billion.

Taiwan Semiconductor Q4 Earnings: 3nm and 5nm Nodes Lead Topline Growth, Expands Margins, Issues Strong Q1 Outlook - Taiwan Semiconductor (NYSE:TSM)

TSM guided Q1 revenue to $25B-$25.8B, supported by AI growth but tempered by smartphone seasonality. On Thursday, Taiwan Semiconductor Manufacturing Co's TSM fourth-quarter results beat forecasts, fueled by demand for advanced processor node technologies for artificial intelligence applications. The contract chipmaker, which supplies chips for Nvidia Corp's NVDA graphics processing unit (GPU) and Apple, Inc's AAPL smartphones, guided first-quarter revenue above the consensus. Taiwan Semiconductor reported fourth-quarter revenue of $26.88 billion (NT$868.46 billion), up 38.8% year-over-year, topping the analyst consensus estimate of $26.28 billion. Also Read: OPEC's Optimism Clashes With IEA's Conservative 2025 Oil Growth Projections Net income and earnings per share were NT$374.68 billion and NT$14.45 per share ($2.24) versus analyst consensus of $2.23. In dollar terms, revenue growth was 37.0% year over year and 14.4% quarter over quarter. The top-line performance aligned with the company's guidance of $26.1 billion -- $26.9 billion. Taiwan Semiconductor said its business was supported by demand for its 3-nm and 5-nm technologies. However, it expects smartphone seasonality to impact the first quarter, partially offset by continued growth in AI-related demand. The company said 3-nm accounted for 26% of the total revenue, 5-nm accounted for 34%, and 7-nm technologies accounted for 14%. 7-nm and more advanced technologies comprised 74% of the total wafer revenue. Margin Profile: Taiwan Semiconductor's AI technology moat helped it expand its fourth-quarter gross margins by 600 bps to 59%, as its 3-nm and 5-nm chips gain traction at the cost of Intel Corp INTC and Samsung Electronics SSNLF, which struggled to transition into advanced nodes. Taiwan Semiconductor's operating margin expanded by 740 bps to 49%. Outlook: Taiwan Semiconductor is guided for first-quarter 2025 revenue of $25.0 billion-$25.8 billion versus the $24.97 billion consensus estimate. It expects a gross margin of 57% -- 59% and operating profit margins of 46.5% -- 48.5%. The company earmarked fiscal 2025 capex worth $38 billion-$42 billion (versus $29.8 billion a year ago) amid intensifying geopolitical tensions between the U.S. and China, with the former eying tougher artificial intelligence technology restrictions on the latter, citing national security concerns. Taiwan Semiconductor stock surged over 103% in the last 12 months. Investors can gain exposure to semiconductor manufacturing stocks through the VanEck Semiconductor ETF SMH and the iShares Semiconductor ETF SOXX. Price Action: TSM stock traded higher by 4.86% at $216.85 premarket at the last check on Thursday. Also Read: Broadcom's Latest SAN Switch Offers Scalable, Energy-Efficient Solution for Growing Storage Demands Photo by wakamatsu.h via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$216.354.62%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewAAPLApple Inc$239.540.70%INTCIntel Corp$19.770.25%NVDANVIDIA Corp$138.681.79%SMHVanEck Semiconductor ETF$255.711.79%SOXXiShares Semiconductor ETF$226.301.38%SSNLFSamsung Electronics Co Ltd$42.48-13.8%Market News and Data brought to you by Benzinga APIs

Why Taiwan Semiconductor Stock Was Climbing Today | The Motley Fool

Shares of Taiwan Semiconductor Manufacturing Corporation (TSM 4.95%) were moving higher Thursday after the world's largest contract chip manufacturer posted better-than-expected results in its fourth-quarter earnings report. As of 12:20 p.m. ET, the stock was up by 5.2%. TSMC has been a big winner amid the AI boom and a broader recovery in the chip sector, and that momentum continued in the fourth quarter. Revenue in the period jumped 38.8% to $26.9 billion, topping analysts' consensus estimate of $26.3 billion. The company continued to benefit from the growing adoption of advanced chips as revenue from its 3-nanometer (nm) process technology rose to 26% from 15% in the year-ago quarter. Advanced technologies, which it defines as 7nm or less, accounted for 74% of revenue. Margins also expanded, reflecting both the growth in sales of advanced chips and TSMC's own pricing power. Gross margin improved from 53% to 59%, and operating margin jumped from 41.6% to 49%. As a result, the company reported adjusted earnings per share of $2.24, up 57% year over year. "Our business in the fourth quarter was supported by strong demand for our industry-leading 3nm and 5nm technologies," CFO Wendell Huang said. However, he cautioned, "Moving into first-quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand." Despite the comment above, TSMC still issued much better guidance than expected for the first quarter. It forecasts revenue of $25 billion to $25.8 billion, which would be a sequential decline, but was well ahead of analysts' consensus estimate of $23.9 billion. It also expects operating margin to remain strong, in the 46.5% to 48.5% range. Given the momentum in the AI space, TSMC's dominant position in high-end chip manufacturing, and the company's reasonable valuation, the stock looks like a good bet to move higher.

TSMC: Blowout Q4 Earnings Signal AI Revolution Keeps Gaining Momentum | Investing.com UK

Kick off the new year with a portfolio built for volatility - subscribe now during our New Year's Sale and get up to 50% off on InvestingPro! The AI revolution is reshaping industries, and Taiwan Semiconductor Manufacturing (NYSE:TSM) stands at the heart of this transformation. As the global leader in advanced semiconductor manufacturing, the Taiwanese giant has captured the spotlight in both tech innovation and geopolitics. With a commanding share of nearly 60% of the global chip market and a critical role in enabling AI breakthroughs, TSMC's ascent reflects its unmatched strategic importance. Yet, this growth story isn't without its challenges. As U.S. export restrictions on high-tech chips tighten and geopolitical tensions with China simmer, investors are scrutinizing TSMC's resilience. Despite these headwinds, the company continues to defy expectations as the latest earnings report showed. TSMC has done it again. For the fifth time in six quarters, the company exceeded market expectations, reinforcing its reputation for operational excellence. Year-over-year, revenue surged by an impressive 38.8%, while earnings per share jumped 57%. The revenue breakdown highlights the dominance of its advanced manufacturing processes. The 5-nanometer wafer accounted for 57% of total sales, followed by the 3-nanometer wafer at 26% and the 7-nanometer wafer at 14%. With such strong results, market sentiment could drive a renewed demand impulse as trading unfolds. As the backbone of the AI revolution, TSMC plays a pivotal role in manufacturing chips for industry leaders like Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), and Advanced Micro Devices (NASDAQ:AMD). The company produces roughly 90% of the world's most advanced semiconductors, enabling cutting-edge technologies in artificial intelligence, cloud computing, and autonomous vehicles. While proposed U.S. tariffs on Taiwan-made chips loom, Taiwan's central bank governor downplayed the likelihood of implementation. Even if enacted, TSMC's strong partnerships with U.S. tech giants, which account for about 65% of its revenue, position the company to weather such challenges. Major players like Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT) rely on TSMC for custom AI chips, while Tesla (NASDAQ:TSLA) depends on its innovations to power electric vehicles. Recent U.S. restrictions on advanced semiconductor exports have further heightened the stakes for TSMC. Dividing countries into tiers of access, these measures target China as part of a broader geopolitical strategy. In response, TSMC is bolstering its ties with the U.S., including plans for a $30 billion facility in Arizona to manufacture 2-nanometer chips. These moves aim to mitigate risks from rising tensions between Washington and Beijing. The specter of a potential military conflict remains TSMC's most significant challenge, threatening its operations and Taiwan's critical role in the global tech supply chain. TSMC's stock appears poised for its next upward move. After defending a key demand zone near $200 per share, supported by an upward trendline, the stock shows signs of resuming its broader rally. A close above this level could signal further gains, with the next target at all-time highs. However, a break below $200 would shift the outlook, with the next support level near $190. For investors looking to capitalize on the AI boom, this correction offers a potential entry point at more attractive valuations. *** Curious how the world's top investors are positioning their portfolios for the year ahead? You can find that out using InvestingPro. Don't miss out on the New Year's offer -- your final chance to secure InvestingPro at a 50% discount.

TSMC December sales surge 58% as AI demand remains strong By Investing.com

Investing.com-- TSMC (NYSE:TSM) clocked a sharp increase in its sales for December as the world's biggest contract chipmaker continued to see robust demand from the fast-growing artificial intelligence industry. Sales rose 57.8% year-on-year to T$278.16 billion ($8.44 billion), TSMC said in a statement on Friday. The pace of growth also picked up sharply from the prior month,. The figure brought TSMC's fourth-quarter revenue to T$868.46 billion, up substantially from the T$625.53 seen in the prior year. The strong sales set a positive tone for chip demand going into 2025, as TSMC continued to benefit from heightened capital expenditure on data centers and other AI-related infrastructure. This trend has largely offset weakness in chip demand from consumer electronics, which TSMC warned is unlikely to improve in the near-term. The chipmaker is a key part of the global chip supply chain, and manufactures chips for several major technology companies. AI darling NVIDIA Corporation (NASDAQ:NVDA) is TSMC's biggest customer, and has been a key source of AI-fueled demand over the past two years. TSMC will report its fourth-quarter earnings next week.

Earnings Snapshot: Taiwan Semiconductor Q1 revenue outlook beats amid AI demand

More on Taiwan Semiconductor Manufacturing Company TSMC: My Top AI Pick For 2025 TSMC: A Pre-Earnings Evaluation (Technical Analysis) TSMC: A Growth Story That's Still Undervalued TSMC Q4 Earnings Ahead: Street expects biggest profit jump in two years Nvidia's Blackwell lineup suggests less demand for TSMC's CoWoS-S: Kuo

TSMC: My Top AI Pick For 2025 (NYSE:TSM)

Anticipated strong Q4 earnings and 29% profit growth in 2025 reinforce TSMC's promising risk/reward profile. Last week's release of unaudited December sales figures for Taiwan Semiconductor Manufacturing Company Limited aka TSMC (NYSE:TSM) is a strong indicator that the artificial intelligence rally has potential to continue unabated in 2025. According to Taiwan Semiconductor A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities. Analyst's Disclosure: I/we have a beneficial long position in the shares of TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

TSMC cuts profit target as cost of diversifying supply chain starts to bite

Taiwan Semiconductor Manufacturing Company has cut its profitability target despite roaring demand for artificial intelligence chips, as the cost burden of diversifying its supply chain starts to bite. The world's largest chip manufacturer said gross margin was expected to drop by a percentage point in the current quarter from 59 per cent in the three months to December 31, due to higher costs at its new fabrication plants, or fabs, in the US and Japan. The contract chipmaker has committed to building three fabs in Arizona, at least two in Kumamoto and one in Dresden, Germany, in response to pressure from customers and foreign governments to rebuild some chip manufacturing capacity in those countries following decades of outsourcing to Asia. More than 90 per cent of the world's most advanced chips are currently built in TSMC's fabs in Taiwan. The margin dilution effect would "become more pronounced throughout the year as Kumamoto and Arizona ramp up" and would reach two to three percentage points a year over the next five years, said Wendell Huang, chief financial officer. The margin pressure comes even as TSMC expects continued strong growth in demand for the AI chips it manufactures for Nvidia and other big customers. The company forecast its overall revenue would increase by close to 25 per cent this year and close to 20 per cent annually over the next five years, driven by 45 per cent annual compound growth in AI chip revenue. In a reflection of that bullish outlook, TSMC said it would increase capital spending this year to between $38bn and $40bn, a more than 30 per cent increase after stagnating for three years. When the last semiconductor cycle peaked, TSMC's gross profit margin hit 62.2 per cent in the final quarter of 2022. But the company suggested that remained an exception. "If the capacity utilisation rate is very high, it is not impossible for us to reach" a level above 60 per cent, said Huang. CC Wei, chief executive, said TSMC was working on a "new methodology that will give Arizona some benefit to minimise the cost gap" against fabs in Taiwan. It would include the use of AI to streamline its transfer of new manufacturing processes from Taiwan and find a "more intelligent ramp-up process", Wei said. Other efforts to narrow the cost gap include building a more complete supply chain locally. But "we need the US government's help for that", he added. TSMC beat its own guidance and analysts' expectations with a 57 per cent year-on-year increase in net profit to NT$374.68bn (US$11.4bn) for the December quarter -- the fastest growth in two years -- and a 38.8 per cent increase in revenue to NT$868.46bn. The company said the impact on its operations from Washington's latest export controls this week, which will restrict the supply of AI chips to all countries but a small group of US allies and partners, would be "minimal". "We have communicated with the US government," said Wei. "We understand from that communication that what they care about most is AI and that they view automotive, consumer electronics and other applications as normal business." It would therefore be "easier to receive approval", he added, to ship chips for those other applications.

Apple And Nvidia Supplier Taiwan Semiconductor Leads Semiconductor Market with 64% Share - Taiwan Semiconductor (NYSE:TSM)

TSMC holds 64% global foundry market share, driven by AI demand, 3nm production, and advanced node price hikes in 2025. Apple Inc AAPL is finalizing the verification of its "made in America" processor chips from Taiwan Semiconductor Manufacturing Co's TSM plant in Arizona. The first batch of commercial chips will likely by this quarter, Nikkei Asia reports. The 2020 pandemic prompted countries including the U.S., Europe, and Japan to consolidate their semiconductor position by tapping chipmakers like Taiwan Semiconductor, Intel Corp INTC, Samsung Electronics Co SSNLF, thereby reducing their dependence on China. Also Read: Taiwan Semiconductor Begins 4nm Chip Production in Arizona, Eyes $11.4 Billion Q4 Profit Additionally, the U.S. started restricting China's access to advanced semiconductor technology, which Washington alleged China utilized to boost its military warfare position. Washington also restricted China's access to sophisticated Nvidia Corp NVDA and Taiwan Semiconductor's artificial intelligence chips. The country also canvassed its allies, including Taiwan and the Netherlands (home to chip equipment maker ASML Holding ASML, to restrict semiconductor trade with China. Meanwhile, Taiwan Semiconductor bagged a 64% share of the global foundry business in the third quarter of 2024, up from 62% in the second quarter, Taipei Times cites Counterpoint Research. Last November, Counterpoint said Taiwan Semiconductor owed its moat to high utilization rates in its 5nm and 3nm processes, artificial intelligence (AI) accelerator demand, and smartphone sales. Samsung came second with a 12% share backed by its 4nm and 5nm processes, Taipei Times cites Counterpoint. China's Semiconductor Manufacturing International came third after it secured 6%, backed by its 28nm process, Taipei Times cites Counterpoint. United Microelectronics Corp UMC tied with GlobalFoundries Inc GFS with a 5% share backed by demand in the Internet of Things and communications infrastructure markets. The 3nm process scored a second position in the third quarter, bagging a 13% share, on the back of the full utilization of Taiwan Semiconductor's production capacity, as production by Apple, Qualcomm Inc QCOM, Intel gained momentum. The 5 and 4nm processes bagged the numero uno position, securing 24% of the market in the third quarter, courtesy of demand for Nvidia's Blackwell graphics processing units. Taiwan Semiconductor plans to start producing its 2nm process at its fab in Hsinchu County's Baoshan Township in 2025. Goldman Sachs expressed optimism over Taiwan Semiconductor's prospects, citing AI demand and advanced node growth. Taiwan Semiconductor's price hikes for 3 and 5nm nodes in 2025 (while Intel and Samsung struggle to develop their AI technology moat) could boost its margins to over 59%. Taiwan Semiconductor stock surged over 98% in the last 12 months. Investors can gain exposure to the stocks of companies that manufacture semiconductors through VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX. Price Action: TSM stock is down 0.65% at $200.05 at the last check on Tuesday. Also Read: Nvidia and AI Chip Stocks Brace for Impact as Biden Administration Considers New China Export Ban: Report Image via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$199.98-0.69%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewAAPLApple Inc$233.34-0.45%ASMLASML Holding NV$738.661.55%GFSGLOBALFOUNDRIES Inc$41.090.74%INTCIntel Corp$18.91-1.54%NVDANVIDIA Corp$130.76-1.85%QCOMQualcomm Inc$157.480.22%SMHVanEck Semiconductor ETF$243.13-0.62%SOXXiShares Semiconductor ETF$216.69-0.39%SSNLFSamsung Electronics Co Ltd--%UMCUnited Microelectronics Corp$6.321.85%Market News and Data brought to you by Benzinga APIs

Taiwan Semiconductor Projects AI Revenue To Double In 2025, Highlights Advanced Packaging As Growth Driver: Analyst - Taiwan Semiconductor (NYSE:TSM)

Needham analyst Charles Shi reiterated Taiwan Semiconductor Manufacturing Co TSM with a Buy and a $225 price target. Taiwan Semiconductor guided 2025 revenue growth to be in the mid-20s percent range, primarily in line with consensus. More interestingly, management guided AI revenue to double in 2025 after tripling in size and reaching the mid-teens percent of the overall revenue in 2024. Also Read: OPEC's Optimism Clashes With IEA's Conservative 2025 Oil Growth Projections Taiwan Semiconductor extended the AI forecast horizon to 2029 and guided to a mid-40% CAGR for AI revenue over the next five years. For the company overall, Taiwan Semiconductor management noted long-term revenue CAGR inching and approaching 20% (versus 15%-20% previously). The numbers imply Taiwan Semiconductor's expected non-AI revenue growth for 2025 will be in the low teens versus the high teens in 2024. It does not necessarily mean Taiwan Semiconductor is calling for a deceleration of non-AI growth in 2025, and may merely reflect conservatism, it shows that management's conviction on a stronger non-AI recovery in 2025 is not quite there. Another number that management provided on the call also reveals the same trend. Taiwan Semiconductor guided that "Foundry 2.0" TAM, which includes conventional foundry, advanced packaging, and testing, will grow by 10% in 2025 (versus 6% in 2024). Since Taiwan Semiconductor accounts for roughly 34% of the Foundry 2.0 TAM (~$265 billion in 2024), its 25% growth in 2025 would imply roughly flattish growth for the rest of the Foundry 2.0 TAM, which is largely non-AI-related. Taiwan Semiconductor guided 2025 CapEx to be $38 billion-$42 billion, significantly higher than the mid-$30 billion range Shi had thought due to Shi's more cautious view on front-end equipment spending. The ~$40 billion CapEx in 2025 translates to ~35% capital intensity (versus the analyst's previously called low 30s percent intensity). Taiwan Semiconductor said roughly 70% of the spending will be on advanced nodes, 10%-20% on specialty devices and 10%-20% on packaging, testing and photomask making. Historically, the breakdown of CapEx has been 70%- 80% on advanced nodes, 10%- 20% on specialty devices and 10% on packaging, testing and photomask making. While Taiwan Semiconductor did not provide the actual spending mix in the past, Shi noted guidance suggests that directionally, advanced node spending is trending down while back-end spending (packaging/testing) is trending up. Shi added that advanced packaging related to CapEx will grow faster than overall CapEx. It has been anticipated that as Moore's Law slows, packaging will play a bigger role in extending the semiconductor roadmap. However, the better indicator is Taiwan Semiconductor's forecast of packaging revenue. Taiwan Semiconductor management said on the call that packaging revenue, which accounted for over 8% of the overall revenue in 2024, will account for over 10% of the overall revenue in 2025. Shi noted that historically, Taiwan Semiconductor's packaging revenue was about 7%- 8% of total revenue. The faster growth of packaging revenue should lead to more rapid development of packaging CapEx. On the advanced node spending side, Taiwan Semiconductor confirmed that more 5nm to 3nm conversion is on the way in 2025 but also confirmed that the second fab in Arizona, which is built for 3nm and below, will start to take tools by the end of 2025. Taiwan Semiconductor in the past said that the second fab in Arizona will enter mass production in 2028. Tool move-in by the end of 2025 means the schedule should be pulled into 2027. TSM Price Action: Taiwan Semiconductor stock is up 4.78% at $216.69 at publication Thursday. Also Read: Boeing Reports 348 Planes Delivered In 2024, Beats Estimates Despite Production ChallengesPhoto TSMTaiwan Semiconductor Manufacturing Co Ltd$216.824.85%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

Taiwan chipmakers to see positive momentum from AI demand, Citi says By Investing.com

Investing.com-- Taiwanese chipmaking stocks clocked strong revenues in the fourth quarter, with Citi analysts projecting continued sales growth as the sector benefited from rapidly increasing artificial intelligence development. Chipmaking majors such as TSMC (TW:2330), MediaTek Inc (TW:2454), ASE Industrial Holding Co Ltd (TW:3711) and KYE Systems Corp (TW:2365) logged strong sales in December, which also pointed to robust revenues for the December quarter. Citi noted that while depreciation in the Taiwan dollar had also boosted revenues, they expected "positive momentum to continue in the AI supply chain," and also expected product upgrades in edge AI to support Taiwan's chip industry. Citi said among semiconductor stocks, TSMC, Mediatek , ASEH and KYEC were its more preferred picks, while among downstream chip firms, it preferred Quanta Computer Inc (TW:2382), Wiwynn Corp (TW:6669), Hon Hai Precision Industry Co Ltd (TW:2317), Delta Electronics Inc (TW:2308), Lotes Co Ltd (TW:3533), Accton Technology Corp (TW:2345), Asustek Computer Inc (TW:2357), and Aspeed Technology (TWO:5274). TSMC- the biggest Taiwanese company by market capitalization, will report its December quarter earnings on January 16. Reuters said analysts consensus was for a 58% leap in profit, after its revenue for the quarter surged nearly 28%. The company, which is the world's biggest chipmaker by production capacity, has benefited greatly from a spike in AI-fueled demand over the past two years. "We also expect TSMC to offer a positive outlook, i.e. 10-15% YoY growth for overall non-memory semiconductor industry thanks to normalized inventory level and specs upgrade for edge AI devices," Citi analysts said. But outside AI, the outlook for chips used in computers and personal devices is less upbeat, as consumer electronics demand weakened over the past two years. But Citi also sees improving demand in the coming year, especially on the back of consumer demand for AI applications.