TSMC, the world’s largest semiconductor manufacturer, reported a 57% increase in quarterly profit driven by strong demand for AI chips.
Financial performance highlights: Taiwan Semiconductor Manufacturing Corp. exceeded market expectations with significant growth in both profit and revenue during the fourth quarter of 2023.
- Net profit reached 374.7 billion new Taiwan dollars ($11.4 billion), marking a 57% increase
- Revenue for 2024 grew by nearly 34% to 2.9 trillion new Taiwan dollars ($88 billion)
- Fourth-quarter revenue rose 38.8% to 868.46 billion new Taiwan dollars ($26.4 billion)
Geopolitical context: Recent U.S. export restrictions on advanced AI chips could impact TSMC’s operations and market dynamics.
- The U.S. has implemented new rules limiting AI chip exports to most countries
- About 20 close allies, including Taiwan, will maintain unlimited access to U.S. AI technology
- These restrictions are part of broader U.S. efforts to limit China’s access to advanced technology
Strategic expansion: TSMC is pursuing a significant global manufacturing presence through new facilities in key markets.
- Plans include construction of three factories in the United States
- Two additional manufacturing facilities are planned for Japan
- Both Japanese and U.S. governments are providing substantial funding and subsidies to support domestic chip production
Looking ahead: While TSMC’s current performance demonstrates the strong demand for AI-related semiconductors, the impact of new export controls and geopolitical tensions could reshape the company’s growth trajectory in key markets like China.
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