Taiwan Semiconductor Manufacturing Co. (TSMC), the leading manufacturer of advanced chips for artificial intelligence (AI) applications, is anticipated to announce a remarkable 42% increase in third-quarter profits on Thursday, driven by soaring demand across various industries.
As the world’s largest contract chipmaker, TSMC serves prominent clients, including Apple and Nvidia. Analysts predict the company will report a net profit of T$300.1 billion ($9.33 billion) for the quarter ending September 30, according to an LSEG SmartEstimate, which weighs forecasts from consistently accurate analysts more heavily. This figure marks a significant rise from last year’s third-quarter net profit of T$211 billion.
In a recent update, TSMC reported a notable increase in Taiwan-dollar denominated revenue for the third quarter, surpassing market expectations. The company is expected to provide fourth-quarter revenue guidance in U.S. dollars during its upcoming earnings call.
However, TSMC’s outlook has been slightly tempered by ASML, the leading supplier of chipmaking equipment, which projected lower-than-expected sales and bookings for 2025 due to persistent weaknesses in parts of the chip market. This forecast led to a significant drop in ASML’s shares, marking its largest single-day decline since 1998.
On Wednesday, TSMC’s shares closed down 2.3% at T$1,045, although they remain close to their historic high of T$1,080 reached on July 11. During the quarterly earnings call scheduled for 0600 GMT on Thursday, TSMC will provide updates on its current quarter outlook and full-year performance, including capital expenditure plans as it strives to expand production capabilities.
The chipmaker is investing billions in new factories worldwide, notably $65 billion for three plants in Arizona, while maintaining the majority of its manufacturing operations in Taiwan. In its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure for the year to between $30 billion and $32 billion, up from an earlier estimate of $28 billion to $32 billion.
Historically, the second half of the year is a peak season for Taiwanese tech companies, as they rush to meet year-end demand in major Western markets. The AI boom has significantly boosted the share price of Asia’s most valuable company, with TSMC’s Taipei-listed stock surging 76% this year, compared to a 28% gain for the broader market.
Revered in Taiwan as the “sacred mountain protecting the country” due to its pivotal role in the export-dependent economy, TSMC faces limited competition, although both Intel and Samsung are actively working to challenge its supremacy in the semiconductor industry.
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