Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to announce a significant third-quarter profit increase, driven by the surge in demand for artificial intelligence (AI) applications. Analysts project TSMC’s net profit will jump 42% to T$300.1 billion ($9.33 billion) for the quarter ending Sept. 30, up from T$211 billion in the same period last year, according to an LSEG SmartEstimate. This boost comes as AI adoption accelerates across various industries, with major clients like Apple and Nvidia contributing to TSMC’s growth.
TSMC, the world’s largest contract chipmaker, had already reported third-quarter revenue in Taiwan dollars that exceeded market expectations. The company is set to provide U.S. dollar-based guidance for fourth-quarter revenue during its quarterly earnings call on Thursday. However, despite strong performance, TSMC’s stock saw a decline of 2.3% on Wednesday, closing at T$1,045, just below its July 11 peak of T$1,080. The dip followed a forecast from ASML, a supplier to TSMC, which projected weaker-than-expected sales for 2025.
While TSMC continues to grow, the company is investing heavily in expanding its manufacturing capacity overseas, with $65 billion earmarked for three new factories in Arizona. Despite these investments, the majority of TSMC’s production will remain in Taiwan. In July, TSMC raised its full-year revenue forecast and revised its capital expenditure to between $30 billion and $32 billion, slightly up from the previous estimate of $28 billion to $32 billion.
The company’s position as a leader in chip manufacturing has been further cemented by the AI boom, which has fueled a 76% surge in its stock value this year. By comparison, the broader Taiwan market has gained 28% over the same period. TSMC remains a crucial player in Taiwan’s economy, with minimal competition from rivals like Intel and Samsung, who are striving to challenge its dominance.
Featured Image courtesy of Bloomberg.com
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