TAIPEI -- Taiwan Semiconductor Manufacturing Co.(TSMC) reported a record net profit of 374.68 billion New Taiwan dollars ($11.3 billion) for the fourth quarter, representing a 57% increase year-on-year, driven largely by strong demand for artificial intelligence (AI) chips. Revenue for the quarter reached NT$868.46 billion, up 38.8% from the previous year. For the full year, TSMC posted a net profit of NT$1.17 trillion, supported by record annual revenue of NT$2.89 trillion. However, the company faces significant challenges in 2025, including the impact of new overseas plants on profit margins and the tightening of U.S. export controls.
In a separate yet related development, the U.S. government has announced additional restrictions targeting the semiconductor sector, which could further affect TSMC's operations. The Biden administration has implemented new rules restricting major chipmakers, including TSMC and Samsung, from providing advanced manufacturing services to China and other unverified chip developers. The U.S. Commerce Department has broadened licensing requirements for companies involved in exporting chips produced at 14 or 16-nanometer nodes—key technologies for advanced applications such as AI—unless they have U.S. authorization.
These export controls are part of a broader strategy by the U.S. to limit China's access to cutting-edge technology, reflecting ongoing tensions over national security and technological competitiveness. As TSMC navigates its record profitability amid a boom in AI demand, it must also contend with these regulatory challenges that could hinder growth and profitability in the evolving global semiconductor landscape.
With the semiconductor industry being shaped by advancements in AI and tightening regulations, TSMC's ability to adapt to these challenges will be crucial in maintaining its market leadership and profitability in the coming years. The intersection of soaring demand for AI chips and increasing export restrictions creates a complex environment for the world's largest contract chipmaker as it seeks to balance growth with compliance in a rapidly changing geopolitical environment.
