TSMC Profit Soars on AI Boom Amid Trade Tensions
Hong Kong (AP) — Taiwan's largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Corp. (TSMC), has reported a significant increase in profit for the last quarter, driven by the rapid growth of artificial intelligence.
The company's net profit rose 57% to 374.7 billion new Taiwan dollars ($11.4 billion) in the fourth quarter, exceeding expectations and marking another strong performance for the chipmaker.
Record-Breaking Revenue
TSMC also reported record-breaking revenue for the year, with its sales rising almost 34% to 2.9 trillion new Taiwan dollars ($88 billion) in 2024, further solidifying its position as the world's largest semiconductor manufacturer.
The company's revenue for the fourth quarter reached 868.46 billion new Taiwan dollars ($26.4 billion), a significant increase of 38.8% from the same period last year and also higher than forecasts.
US-China Trade Tensions Impact
TSMC's success, however, comes amidst the ongoing US-China trade tensions over technology and trade. The US government has imposed new restrictions on exports of AI chips to most countries, limiting China's access to these critical components.
The regulations, which cap the number of AI chips that can be exported to certain countries, may impact demand for AI chips from TSMC and other chipmakers in Taiwan.
TSMC Expands Production Capacity
Despite these challenges, TSMC remains committed to expanding its production capacity globally. The company has plans to open three factories in the US and two more in Japan, with significant investment from both governments to boost domestic chip production.
The Japanese government has offered billions of dollars in funding and subsidies to support TSMC's expansion plans, reflecting the critical importance of semiconductors for the country's economy and technological advancements.
Strategic Partnerships
TSMC's strategic partnerships with governments around the world underscore its commitment to meeting growing demand for semiconductors in emerging markets and supporting domestic industries through localized production.
The company's expansion plans, including new facilities in Taiwan, Japan, and the US, demonstrate its proactive approach to addressing global supply chain challenges and capitalizing on opportunities presented by the AI boom.
AI Boom Continues to Drive Growth
The AI market continues to experience rapid growth, with increasing demand for specialized chips driving innovation and investment in this sector. TSMC's success is a testament to its position at the forefront of this technological revolution.
The company's ability to adapt quickly to changing market conditions and capitalize on emerging trends has enabled it to maintain its leadership position as the world's largest semiconductor manufacturer.