Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to post a 40% jump in third-quarter profit, driven by strong demand for its advanced chips used in artificial intelligence (AI) applications. The company, a major supplier to tech giants like Apple and Nvidia, is forecasted to report a net profit of T$298.2 billion ($9.27 billion) for the quarter ending September 30, based on a LSEG SmartEstimate compiled from 22 analysts. This projection marks a significant increase from the T$211 billion net profit recorded in the same period last year.
The rise in profit comes as TSMC continues to capitalize on the growing AI trend. The company recently reported a third-quarter revenue increase that surpassed market expectations, with key clients such as Apple, Nvidia, AMD, Qualcomm, and Mediatek launching products that rely heavily on TSMC’s advanced chip technologies. According to Li Fang-kuo, chairman of President Capital Management, TSMC’s third-quarter earnings are expected to significantly exceed market predictions.
On Thursday, TSMC will provide updates on its outlook for the current quarter and the full year during its quarterly earnings call. The company is also expected to discuss its capital expenditure as it expands its manufacturing capacity, particularly through billion-dollar investments in new factories overseas. This includes a $65 billion investment in three new plants in Arizona, although TSMC has stated that the bulk of its production will remain in Taiwan.
Earlier in the year, TSMC adjusted its capital expenditure forecast to between $30 billion and $32 billion, up from a previous estimate of $28 billion to $32 billion. The company also raised its full-year revenue outlook during its last earnings call in July, driven by the ongoing AI boom.
TSMC’s stock has surged by 77% this year, reflecting investor confidence in the company’s role as the world’s largest contract chipmaker. In comparison, the broader market has seen a 28% rise. Despite its dominance, TSMC faces little competition in the AI chip manufacturing space. Rival Intel, once a leading force in the semiconductor industry, has struggled with mounting losses as it works to build its contract manufacturing unit, which is aimed at challenging TSMC’s position.
Featured image courtesy of Free Malaysia Today
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