TSMC Earnings: Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s largest and most influential semiconductor manufacturers, is set to report a strong surge in its quarterly profit, largely driven by rising demand for chips used in artificial intelligence (AI) hardware. However, proposed U.S. restrictions on chip exports could cast a shadow over the company’s December quarter results and its future growth outlook.
TSMC is scheduled to release its quarterly earnings report Thursday morning, and analysts are predicting a significant boost in profits. According to a consensus estimate from 26 analysts surveyed by FactSet, TSMC is expected to report a 55% rise in net profit, amounting to 370.64 billion New Taiwan dollars (approximately $11.24 billion) for the quarter. This increase is largely attributed to the burgeoning demand for semiconductors used to power AI systems, which has been one of the key growth drivers for the semiconductor industry.
In terms of revenue, TSMC has already reported monthly figures that suggest its December-quarter revenue reached 868.5 billion New Taiwan dollars (around $26.35 billion), surpassing the analyst consensus of 854 billion New Taiwan dollars. This result also exceeded the company’s earlier guidance, which had projected quarterly revenue between $26.1 billion and $26.9 billion. The company’s strong performance reflects a robust demand for advanced semiconductor manufacturing, especially for chips used in AI infrastructure.
TSMC’s position in the global semiconductor supply chain is a critical factor in its success. As the dominant manufacturer of high-end chips, the company plays an essential role in the production of key hardware components for leading tech companies. Notably, TSMC is the primary supplier of chips for Nvidia, the dominant player in the AI semiconductor market. Nvidia’s chips power the vast majority of AI systems and applications, making TSMC’s role in the AI boom particularly significant.
In addition to its AI-related business, TSMC also manufactures chips for other major companies, including Apple, Qualcomm, and Advanced Micro Devices (AMD). TSMC’s production of core processors for Apple’s iPhones, Qualcomm’s mobile chipsets, and AMD’s processors positions the company as a vital player in the broader semiconductor market, helping it to maintain a diversified revenue stream.
As TSMC looks ahead to the future, analysts are also watching for any financial guidance the company might provide for 2025. Deutsche Bank analyst Robert Sanders recently noted that TSMC could potentially see sales growth of 20% to 25% in U.S. dollar terms in 2025, driven largely by continued global investment in AI infrastructure. This outlook highlights the growing role that AI will play in the company’s business moving forward.
While TSMC’s earnings report is expected to showcase its success in capitalizing on AI demand, analysts will also be closely monitoring the company’s commentary on the proposed export restrictions from the Biden administration. The U.S. has been considering new measures that would impose caps on the export of AI chips to more than 120 countries, with Taiwan, where TSMC is based, currently excluded from the proposed limits. However, some of TSMC’s key customers, such as Nvidia, could be impacted by these restrictions, which could affect the company’s future prospects.
The proposed export curbs are part of broader efforts by the U.S. government to maintain its technological edge in AI and limit the spread of advanced chip technologies to certain countries. While Taiwan has been excluded from these proposed restrictions, TSMC may face indirect challenges if its customers are affected by these export limitations. As such, any commentary from TSMC about how these restrictions could impact its business or its customers will be of significant interest to investors.
In summary, TSMC’s earnings report is expected to highlight the strong demand for AI chips and the company’s pivotal role in the global semiconductor market. However, the potential impact of U.S. export curbs on AI chips looms as a key issue for the company moving forward. As TSMC continues to navigate both opportunities and challenges in the semiconductor industry, its upcoming earnings report will provide valuable insights into its ability to sustain growth in an increasingly competitive and complex global market.