TSMC smashes forecasts with record profit, flags more US factories
Its results come as Taiwan signalled that a tariff deal with the US could come soon
[TAIPEI] TSMC, the world’s main producer of advanced AI chips, on Thursday posted a forecast-smashing 35 per cent jump in fourth-quarter profit to record levels, predicted robust growth this year and flagged more US manufacturing capacity was in the works.
Riding high on what it calls the “AI mega trend”, TSMC said its customers were “providing strong signals” and reaching out directly to request capacity.
The Taiwanese company, which counts Nvidia and Apple as major customers, last year announced plans to invest US$100 billion in the US, on top of US$65 billion pledged for three plants in the state of Arizona, one of which is up and running.
Additional land had been purchased in Arizona, TSMC chief executive CC Wei told a news briefing, saying that provided a hint to its US plans but did not elaborate.
US Secretary of Commerce Howard Lutnick said in a podcast released last week that TSMC was set to invest more in the country. The New York Times has also reported that the Trump administration is nearing a trade deal with Taiwan to reduce its tariff rate to 15 per cent from 20 per cent and wants TSMC to commit to building at least five more facilities in Arizona.
Taiwan signalled on Thursday that a tariff deal with the US could come soon.
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Net profit for October-to-December quarter climbed to NT$505.7 billion (S$20.6 billion), its seventh straight quarter of double-digit growth, well ahead of a NT$478.4 billion LSEG SmartEstimate. First-quarter revenue could surge as much as 40 per cent from a year earlier to US$35.8 billion, it said.
It added that capital spending this year could jump as much as 37 per cent to US$56 billion, and would increase “significantly” in 2028 and 2029.
Capacity was very tight right now and it was working hard to narrow the gap between supply and demand, it said, adding that construction was underway at a second fab in Japan, while it will continue to invest in Taiwan.
The boom in artificial intelligence has helped TSMC, Asia’s most valuable listed company, outshine its rivals. It now boasts a market capitalisation of around US$1.4 trillion – more than twice that of South Korea’s Samsung Electronics.
TSMC’s Taipei-listed shares jumped 44 per cent last year, outperforming a 25.7 per cent rise for the broader market. They are up around 9 per cent so far this year. REUTERS
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