TSMC likely to post fourth-quarter profit leap driven by AI boom

[TAIPEI] TSMC, the world’s largest manufacturer of advanced artificial intelligence chips, is expected to post a 28 per cent jump in fourth-quarter net profit to a record high on Thursday driven by ongoing strong demand for AI infrastructure.

Taiwan Semiconductor Manufacturing Co, the world’s top contract chipmaker and a key supplier to Nvidia and Apple, is forecast to report a net profit of NT$479.1 billion (S$19.5 billion) for the three months through Dec 31, according to an LSEG SmartEstimate compiled from 19 analysts.

SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate.

TSMC, Asia’s most valuable listed company with a market capitalisation of around US$1.4 trillion – more than twice that of South Korean rival Samsung Electronics – will also provide first-quarter and full-year guidance in an earnings call scheduled for 0600 GMT.

It last week reported a market-forecast-beating rise in fourth-quarter revenue of 20.45 per cnet. Any figure above NT$452.3 billion would mark the company’s highest-ever quarterly net income and its eighth consecutive quarter of profit growth.

Research firm IDC expects TSMC’s revenue to grow between 25 per cent and 30 per cent in 2026 in US dollar terms, up from its previous forecast range of 22 to 26 per cent, citing booming demand for AI server accelerators and significant contributions from the company’s next-generation 2-nanometre node.

TSMC is investing US$165 billion to build chip factories in the US state of Arizona, and US Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country.

The US administration is nearing a trade deal with Taiwan to reduce its tariff rate to 15 per cent and wants chipmaker TSMC to commit to building at least five more facilities in Arizona, the New York Times reported on Monday.

TSMC, which is currently in its pre-earnings quiet period, declined to comment on whether it would invest more in the US in addition to its announced commitments.

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It remains unclear how much US President Donald Trump’s tariffs will affect TSMC.

Taiwan’s exports to the United States are now subject to a 20 per cent tariff, but that excludes chips.

TSMC’s Taipei-listed shares gained 44.2 per cent last year, outperforming the 25.7 per cent rise for the broader market, and are already up 10 per cent so far this year. REUTERS