Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) announced an optimistic forecast for its 2025 sales, predicting a nearly 35 percent increase in U.S. dollar terms, driven by robust demand for artificial intelligence applications. This marks an upgrade from the 30 percent growth estimate made in July.
According to Focus Taiwan, TSMC Chairman and CEO C.C. Wei revealed these projections at an investor conference, attributing the growth not only to AI demand but also to signs of recovery in other end-user devices. Before the conference, TSMC reported a record third-quarter net profit of NT$452.30 billion (US$14.78 billion), fueled by demand for emerging technologies and advanced processes.
Wei addressed the potential impact of U.S. tariff policies, noting that while clients have not adjusted their orders, higher tariffs could affect demand for consumer and price-sensitive products. He emphasized the company’s vigilance regarding potential risks. Following client discussions, Wei stated that the compound annual growth rate (CAGR) for TSMC’s AI-related chip sales from 2024 to 2029 is expected to surpass the previous 45 percent estimate.
Chief Financial Officer Wendell Huang projected fourth-quarter sales of US$32.2-33.4 billion, with the midpoint indicating a 1 percent decline from the previous quarter, a typical trend for the semiconductor industry during the fourth quarter. Huang also forecasted TSMC’s gross margin to reach 59-61 percent, with a slight median increase of 0.5 percentage points.
Huang pointed out that the Taiwan dollar’s expected average of NT$30.6 against the U.S. dollar in the fourth quarter, compared to NT$29.91 in the third, should enhance the company’s gross margin. However, higher costs at overseas facilities may reduce the gross margin by 1-2 percentage points this year, a smaller impact than previously estimated due to economies of scale.
In response to the burgeoning AI demand, TSMC increased its capital expenditure forecast to US$40-42 billion from the previous US$38-42 billion, allocating 70 percent to advanced process development, 10-20 percent to specialty processes, and 10 percent to high-end IC assembly, testing, photomasking, and other items. In the third quarter, TSMC’s capex was US$9.7 billion, slightly higher than the second quarter and significantly up from US$6.4 billion a year earlier. For the first nine months of the year, total capex reached US$29.39 billion, a 58.6 percent increase year-on-year.
