TSMC Set to Report 40% Profit Surge in Q3 Amid Soaring AI Chip Demand

Taiwan Semiconductor Manufacturing Co. (TSMC) is projected to announce a 40% profit boost for Q3, fueled by robust demand for AI chips. Serving major clients such as Apple and Nvidia, TSMC's advanced technologies have positioned the company to exceed market expectations, cementing its leadership in the semiconductor industry.

TSMC Anticipates $9.27 Billion Q3 Profit as AI Demand Fuels Strong Growth from Major Clients

On October 10, Taiwan Semiconductor Manufacturing Co, the primary manufacturer of sophisticated processors used in artificial intelligence applications, is anticipated to announce a 40% increase in third-quarter profits due to increased demand, per Reuters.

The surge towards AI has been advantageous for the world's largest contract chipmaker, which serves clients such as Apple and Nvidia.

According to an LSEG SmartEstimate compiled from 22 analysts, TSMC is anticipated to announce a net profit of T$298.2 billion ($9.27 billion) for the quarter ending September 30. Intelligent estimates give forecasts from more consistently precise analysts with a higher weighting.

In comparison, the 2023 third-quarter net profit of T$211 billion is roughly equivalent to that estimate.

TSMC reported a significant increase in third-quarter revenue last week, as reported in Taiwan dollars, surpassing market expectations. At its earnings conference, the organization disclosed its revenue projections in U.S. dollars.

"Most of TSMC's major clients, including Apple, Nvidia, AMD, Qualcomm, and MediaTek, are launching new products which heavily rely on TSMC's advanced process technologies," said Li Fang-Kuo, chairman of President Capital Management.

"TSMC's Q3 earnings will exceed expectations by a lot," Li added.

TSMC to Update Outlook Amid Expansion, $65B U.S. Investment, and 77% Stock Surge Driven by AI Growth

TSMC will update its outlook for the current quarter, the whole year, and its capital expenditure during its quarterly earnings call on October 10, 0600 GMT. The company is expanding production.

Most manufacturing will continue in Taiwan even though TSMC is investing billions in constructing new factories overseas. This includes $65 billion for three facilities in the U.S. state of Arizona.

On its most recent earnings call in July, TSMC revised its capital expenditure plans for this year to $30 billion to $32 billion and increased its full-year revenue forecast from $28 billion to $32 billion.

The Taipei-listed stock of TSMC has increased by 77% this year due to AI growth, whereas the broader market has only experienced a 28% increase. This is the most valuable company in Asia.

TSMC, headquartered in Hsinchu and colloquially referred to as the "sacred mountain protecting the country" due to its critical position in Taiwan's export-oriented economy, encounters minimal competition.

Five-decade-old Intel, once the dominant force in the semiconductor industry, is currently experiencing one of its most challenging periods as losses accumulate at the contract manufacturing facility it is constructing to challenge TSMC.