Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday announced an optimistic forecast for its 2025 sales, predicting a growth of almost 35 percent in U.S. dollar terms. This projection marks an upgrade from the 30-percent growth estimate provided in July, driven by robust global demand for artificial intelligence applications.
According to Focus Taiwan, TSMC Chairman and CEO C.C. Wei highlighted strong AI-related demand as a key factor in the company’s growth outlook. He also noted that other end-user devices have shown signs of mild recovery. The announcement came during an investor conference where TSMC also reported a record third-quarter net profit of NT$452.30 billion (US$14.78 billion), spurred by emerging technologies and sales of its advanced processes.
Discussing potential challenges, Wei remarked on the possible impact of U.S. tariff policies. He indicated that while clients have yet to adjust their orders, higher tariffs could impact demand for consumer and price-sensitive products. TSMC remains vigilant to potential risks in this area.
Wei also shared insights from client discussions, noting that the compound annual growth rate (CAGR) of TSMC’s sales from AI-related chips between 2024 and 2029 is expected to exceed an earlier estimate of 45 percent. This reflects a stronger-than-anticipated global demand for AI technology.
Chief Financial Officer Wendell Huang provided projections for the fourth quarter, with sales expected to be between US$32.2-33.4 billion. The midpoint of this range would represent a 1 percent decline from the previous quarter, as the semiconductor industry typically experiences a slowdown during this period.
TSMC’s gross margin is forecasted to be between 59-61 percent, with a median point expected to rise by 0.5 percentage points. Huang also mentioned that the Taiwan dollar’s expected average of NT$30.6 against the U.S. dollar in the fourth quarter could positively impact gross margin due to the weaker local currency.
Despite higher costs at overseas facilities, economies of scale are projected to limit the reduction in TSMC’s gross margin to 1-2 percentage points this year, an improvement from the earlier estimate of 2-3 points.
With AI demand on the rise, TSMC has increased its capital expenditure forecast to US$40-42 billion from US$38-42 billion to accommodate client needs. Huang noted that 70 percent of this expenditure will focus on advanced process development, with the remainder allocated to specialty processes and high-end IC assembly, testing, photomasking, and other areas.
In the third quarter, TSMC’s capital expenditure reached US$9.7 billion, showing a slight increase from US$9.63 billion in the second quarter and a significant rise of 51.5 percent from US$6.4 billion a year earlier. For the first nine months of this year, the company’s capital expenditure totaled US$29.39 billion, reflecting a 58.6 percent year-on-year increase.
