TSMC expects $26 billion in revenue in Q1, boosted by AI

Taiwan Semiconductor Manufacturing Co. (TSMC) reported record quarterly earnings on Thursday, forecasting strong revenue growth in the first three months of the year, driven by growing demand for chips used in processing artificial intelligence applications.

Despite the boom in business, the company faces challenges from technology restrictions imposed by the U.S. government on China. The Biden administration announced this week that it intends to tighten restrictions on exports of chips and AI-related technology.

While Taiwan and close U.S. allies will get unlimited access to U.S. AI technology, the additional restrictions could impact demand from some customers.

TSMC faces uncertainty as President-elect Donald Trump approaches the inauguration, especially in light of his administration’s threats to impose wide-ranging import tariffs.

For his part, the company’s CEO, C.C. Wei said the U.S. export restrictions on AI chips destined for China are a “manageable” issue for the company, noting that TSMC can handle these challenges without significantly impacting its business.

He added that the company is currently working on applying for special permits for some customers who may be affected by the U.S. export restrictions on AI chips. He expressed confidence that those permits will be granted, without providing further details.

The company is building new factories in the United States, Japan, Germany and Taiwan, stressing that all projects are on track.

The surge in demand for AI technology has helped boost the company’s stock price, with its Taipei-listed shares up 81% in the past year, compared with a 28.5% gain in the broader market. Shares closed up 3.8% on Thursday ahead of the earnings announcement.