TSMC Anticipates 40% Surge in Third-Quarter Profit Driven by Strong AI Chip Demand
TSMC anticipates a 40% increase in third-quarter profit driven by strong demand for AI chips. Analysts project a net profit of T$298.2 billion for the quarter ending on Sept. 30. TSMC's revenue exceeded expectations in the third quarter, with a positive outlook for the full year.
As the world's largest contract chipmaker with renowned clients like Apple and Nvidia, TSMC has reaped the benefits of the escalating interest in AI technologies. Analysts predict a net profit of T$298.2 billion ($9.27 billion) for the quarter ending on Sept. 30, a substantial leap from the previous year's T$211 billion.
TSMC recently disclosed a surge in third-quarter revenue, surpassing market expectations in Taiwan dollars. The company typically provides its revenue forecast in U.S. dollars during its earnings conference.
According to Li Fang-kuo, chairman of President Capital Management, major clients such as Apple, Nvidia, AMD, Qualcomm, and Mediatek are launching new products heavily reliant on TSMC's advanced process technologies. Li expressed confidence that TSMC's Q3 earnings will surpass expectations by a significant margin.
During the upcoming quarterly earnings call on Thursday at 0600 GMT, TSMC will update its projections for the current quarter and the full year, including its capital expenditure plans as it strives to enhance production capacity.
Despite investing billions in constructing new factories overseas, notably US$65 billion on three facilities in Arizona, TSMC affirms that the majority of manufacturing will remain in Taiwan. In a strategic move, the company raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between US$30 billion and US$32 billion.
The surge in AI demand has propelled TSMC's stock price, with a remarkable 77% increase in its Taipei-listed shares this year, outperforming the broader market's 28% gain. Headquartered in Hsinchu, TSMC is affectionately known as the "sacred mountain protecting the country" due to its pivotal role in Taiwan's export-driven economy and faces minimal competition.
In contrast, Intel, once a dominant force in the semiconductor industry, is grappling with mounting losses as it expands its contract manufacturing unit to rival TSMC. The company, established five decades ago, is facing challenges in its bid to compete with TSMC's market dominance.
TSMC anticipates a 40% increase in third-quarter profit driven by strong demand for AI chips.
Analysts project a net profit of T$298.2 billion for the quarter ending on Sept. 30.
TSMC's revenue exceeded expectations in the third quarter, with a positive outlook for the full year.
Source: REUTERS