TSMC This autumn revenue beats expectations on strong AI demand; Capex to ramp up in 2025

Investing.com– Taiwan Semiconductor Manufacturing Co, often known as TSMC, clocked a stronger-than-expected fourth quarter revenue on Thursday, because it continued to learn from sturdy synthetic intelligence-fueled demand for its superior chips.  

The world’s largest contract chipmaker forecast a considerable improve in capital spending for 2025, citing a pick-up in capability utilization and elevated manufacturing at its new services within the U.S. and Japan.

TSMC’s (TW:2330) (NYSE:TSM) internet earnings surged 57% to T$374.68 billion ($11.60 billion) within the three months to Dec 31, the corporate stated in an announcement. The determine was increased than Bloomberg estimates of T$369.84 billion.

Earnings per share have been $2.24 for the quarter. 

This got here on a income of T$868.46 billion, up almost 39% from the identical interval final yr. The bounce was pushed mainly by rising gross sales and market share of TSMC’s superior 3-nanometer chips. 

For the primary quarter of 2025, TSMC CFO Wendell Huang forecast income between $25 billion and $28 billion, citing some softer seasonal tendencies in smartphone demand and AI funding. 

Huang stated he expects TSMC’s total capability utilization price to marginally enhance in 2025.

The corporate is the world’s largest contract chipmaker, and has benefited enormously from a surge in AI-fueled demand for superior chips over the previous two years. 

TSMC is ready to ramp up capital spending within the face of extra AI demand within the yr, with Huang pegging 2025 capital expenditures between $38 billion- $42 billion, up sharply from $29.8 billion in 2024. About 70% of this shall be for superior processes applied sciences, TSMC’s largest income earner. 

For 2025, TSMC CEO CC Wei forecast income progress round mid-20% in greenback phrases, stating that the corporate will proceed to learn from sustained AI demand.

The corporate ranks tech giants equivalent to NVIDIA Company (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL) amongst its largest prospects, and has benefited enormously from elevated capital spending on AI infrastructure, notably on knowledge facilities used to energy AI applications.

TSMC additionally acts as a bellwether for the broader chip business and AI demand.

However TSMC firm may face some earnings stress within the coming years, particularly because the U.S. just lately outlined much more restrictions on the export of superior chip and AI expertise into China.

TSMC had come beneath elevated scrutiny in late-2024 after a report confirmed {that a} cargo of its superior chips had ended up with Chinese language tech large Huawei, which is blacklisted by the U.S.