Taiwan Semiconductor Manufacturing Co, (TSMC) the main producer of advanced chips used in artificial intelligence (AI) applications, is expected to report a 40% leap in Q3 profit on Thursday. The reason for rise in profit is the soaring demand of AI chips.
(Image Credit: tsmc)TSMC is gearing up to report a significant 40% jump in Q3 profits, hitting an estimated $9.27 billion, benefiting by a surge in demand for AI chips from tech heavyweights like Apple and Nvidia.
TSMC’s profit surge with AI chip demand
TSMC is set to report a net profit of T$298.2 billion ($9.27 billion) for the quarter ended September 30, according to a LSEG SmartEstimate drawn from 22 analysts. That estimate compares to the 2023 Q3 net profit of T$211 billion.
TSMC’s earnings report
TSMC last week reported a jump in Q3 revenue as reported in Taiwan dollars, comfortably beating market expectations. The company gives its revenue outlook in U.S. dollars at its earnings conference.
“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, at its quarterly earnings call at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure as it races to expand production.
TSMC’s outlook
TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan.
On its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, compared with a previous forecast of $28 billion to $32 billion.
TSMC’s stock
The AI boom has helped drive up the price of shares in Asia’s most valuable company, with TSMC’s Taipei-listed stock soaring 77% so far this year. This rise in TSMC stock compared with a 28% gain for the broader market.
TSMC’s performance
TSMC is colloquially referred to the “sacred mountain protecting the country” for its crucial role in Taiwan’s export-oriented economy, faces little competition.
Once the dominant force in the semiconductor industry, five-decade-old Intel is facing one of its worst periods. Intel has losses mount at the contract manufacturing unit it is building out in hopes of challenging TSMC.
