TSMC Profit Set to Surge 65% as AI Chip Demand Drives Record Earnings

Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading advanced chipmaker, is expected to report another record quarterly profit as surging artificial intelligence (AI) investments fuel demand for high-performance semiconductors.

The Taiwanese chip giant, a major supplier to Nvidia and Apple, is projected to post a 65% increase in third-quarter net profit to T$746.3 billion ($23.4 billion), according to an LSEG SmartEstimate based on forecasts from 16 analysts.

If confirmed, the results would mark TSMC's sixth consecutive quarter of record earnings and its 11th straight quarter of profit growth. The company would surpass its previous quarterly profit record of T$706.56 billion.

TSMC recently reported a 50% year-over-year increase in third-quarter revenue, exceeding analysts' expectations and reaching an all-time high. Strong demand for its advanced 3-nanometer chips and Chip-on-Wafer-on-Substrate (CoWoS) packaging technology continues to support growth.

Morgan Stanley analyst Charlie Chan expects TSMC to increase its full-year revenue growth forecast to the low-to-mid 40% range, compared with its existing projection of more than 40%.

Investors will closely monitor the company's earnings announcement on Thursday, particularly its fourth-quarter outlook, capital expenditure plans, and potential expansion in the United States.

TSMC has committed $265 billion to semiconductor manufacturing facilities in Arizona, including an additional $100 billion investment announced in July. The company is also reportedly considering Texas as another location for future chip production.

Tesla CEO Elon Musk recently indicated that his companies would develop and operate the Terafab AI chip manufacturing complex, potentially allowing TSMC to lease part of the facility.

However, Morningstar analyst Phelix Lee believes a Texas expansion is not immediately necessary because several planned Arizona factories remain unfinished. He suggested Texas could become more attractive for semiconductor investments during the 2030s or 2040s.

Meanwhile, TSMC raised its annual capital expenditure forecast in July to between $60 billion and $64 billion, reflecting continued investment in advanced manufacturing capacity.

The company's market capitalization has reached approximately $2.1 trillion, nearly twice that of Samsung Electronics. Its Taiwan-listed shares have climbed 63% this year, compared with a 69% increase in the broader market.

With global AI infrastructure spending accelerating, TSMC's earnings outlook remains a key indicator of semiconductor industry growth.