The AI frenzy persists, with TSMC's (TSM.US) Q4 net profit anticipated to skyrocket by a staggering 58%.

Chip manufacturing giant TSMC (TSM.US) will report its fourth-quarter earnings on Thursday. According to a survey by LSEG SmartEstimate, analysts expect TSMC's Q4 net profit to be T$377.95bn (US$11.41bn), up 58% YoY. TSMC reported a 39% YoY increase in Q4 revenue to T$868.5bn (US$26.3bn) last week, compared with analysts' average estimate of T$854.7bn. The world's largest contract chipmaker benefits from the AI boom, with clients including Apple and Nvidia. But TSMC faces political uncertainty and resistance from the tariffs policy of US president-elect Donald Trump. Brett Simpson, co-founder and senior analyst at Arete Research, said AI customers would continue to drive TSMC's business growth in 2025. He added: "From the US government's perspective, Arete is optimistic that TSMC can establish a good relationship with the new government, especially considering its new wafer plant cluster in Arizona is the largest foreign direct investment in the US at present." TSMC is investing billions of dollars in new factories overseas, including three in Arizona for US$65bn. The progress of the Arizona plant and its yield (the percentage of usable chips) is crucial for the company, Edward Chen, chairman of the investment department of Fubon Securities, said. He added: "Moreover, the impact of the tariffs imposed by the incoming Trump administration on demand is yet to be seen." TSMC will update its outlook for the current quarter and the full year, including its capital expenditure plan, in its earnings call. TSMC said in its earnings call in October that its capital expenditure in 2025 could be higher than the previous year, but did not reveal the specific figure. The company forecast its capital expenditure in 2024 to be slightly above US$30bn in the earnings call. The AI boom has pushed the share price of the Asia's most valuable company up, with TSMC's US shares surging 93% last year.