TAIPEI, Taiwan: Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker and a key supplier for Apple and Nvidia, is expected to report a 58 percent surge in fourth-quarter profit, driven by strong demand for AI chips.

According to a SmartEstimate from 22 analysts, TSMC is forecast to post a net profit of T$377.95 billion (US$11.41 billion) for the quarter ending December 31, significantly higher than the T$238.7 billion reported in the same period in 2023. The chipmaker recently announced robust fourth-quarter revenue, surpassing market expectations, and will share further financial details in its earnings call on January 16.

Brett Simpson, co-founder of Arete Research, anticipates that 2025 will see continued growth fueled by AI demand. He also highlighted TSMC's major U.S. investment: "From the U.S. government perspective, Arete is optimistic that TSMC can build a good relationship with the new administration, particularly given its new fab cluster in Arizona is the biggest foreign direct investment project in the U.S. at present."

TSMC is investing heavily in overseas factories, including $65 billion in three facilities in Arizona, although most production will remain in Taiwan. Edward Chen, chairman of Fubon Financial's securities investment unit, emphasized the importance of the Arizona fab's progress and yield rates.

"Additionally, the impact of tariffs to be imposed by the incoming Trump administration on demand remains to be seen," Chen added.

On its October earnings call, TSMC projected capital expenditure for 2024 at slightly over $30 billion and indicated that 2025 spending would likely exceed last year's figures. Analysts expect updates on the company's production expansion and capital expenditure plans during Thursday's call.

TSMC's stock surged 81 percent in 2024, far outpacing the 28.5 percent gain of the broader Taipei market index, as the global AI boom bolstered investor confidence in the chipmaking giant.