Taiwan Semiconductor Manufacturing Co. (TSMC), the largest producer of cutting-edge chips crucial for artificial intelligence technologies, is set to unveil a remarkable 40% increase in its third-quarter profit, driven by unprecedented demand in the AI sector. This anticipated profit surge aligns with the growing reliance on TSMC’s advanced manufacturing capabilities by major tech companies, including Apple and Nvidia.
According to forecasts from 22 analysts using LSEG SmartEstimate, a tool that prioritizes the most accurate predictions, TSMC’s net profit for the quarter ending September 30 is expected to reach T$298.2 billion (approximately $9.27 billion) compared to T$211 billion during the same period in 2023. The results are expected to be revealed on Thursday, showcasing TSMC’s impressive revenue growth, which has already surpassed market expectations when reported in Taiwan dollars last week.
With major clients like Apple, Nvidia, AMD, Qualcomm, and Mediatek launching new products heavily dependent on TSMC’s cutting-edge manufacturing technologies, industry experts are optimistic about the company’s performance. Li Fang-kuo, the chairman of President Capital Management, noted that “TSMC’s Q3 earnings will greatly exceed expectations.”
During its upcoming earnings call, TSMC will provide updates not only on its current quarter but also on the company’s outlook for the remainder of the year, including capital expenditure plans as it accelerates production capabilities. The chip giant is investing significantly in its manufacturing infrastructure, with plans that include a massive $65 billion investment to build three new facilities in Arizona. Nevertheless, TSMC has indicated that a majority of its production will continue to be based in Taiwan.
The robust growth in AI-related products has resulted in a surge in TSMC’s stock, which has risen a staggering 77% this year, significantly outperforming the broader market, which has only seen a 28% increase. This remarkable performance reinforces TSMC’s critical role within Taiwan’s export-driven economy, a sentiment reflected in the nickname it has earned locally as the “sacred mountain protecting the country.”
In stark contrast to TSMC’s dominance, Intel, once a leader in the semiconductor industry, is grappling with significant challenges and financial losses as it endeavors to bolster its contract manufacturing segment to compete with TSMC.
As the expectations mount for TSMC’s stellar earnings report, all eyes will be on how the company plans to adapt and grow within the rapidly evolving semiconductor market fueled by the insatiable demand for AI technologies. The stakes are high, and TSMC’s ability to navigate this landscape successfully will be pivotal for its continued leadership in the global semiconductor sector.