Taiwan Semiconductor Manufacturing Co (TSMC), a leading manufacturer of high-tech chips used in artificial intelligence (AI), reported on Thursday a greater-than-expected increase of 54% in profits for Q3, driven by significant demand growth. TSMC, the globe’s premier contract chipmaker for clients such as Apple and Nvidia, has gained considerably from the AI tech boom in diverse industries.
For the three months to September 30th, TSMC announced a net profit of T$325.3 billion (€9.3 billion), exceeding a LSEG SmartEstimate of T$300.2 billion. This estimate was derived from forecasting data from 22 analysts, with greater emphasis on predictions from consistently accurate analysts.
TSMC, with the top market value in Asia for publicly traded companies, stated that their Q3 revenue increased 36% year-on-year to $23.5 billion. This improvement surpasses the company’s initial forecast of $22.4 billion to $23.2 billion. The previous week, TSMC had reported its Q3 revenue in Taiwan dollars, totalling T$759.69 billion.
Q3 capital expenditure amounted to $6.4 billion, proclaimed TSMC, which saw a slight increase from the Q2’s $6.36 billion. On the other hand, fellow chip manufacturer ASML forecasted lower-than-expected 2025 sales and bookings due to persistent market weaknesses, reflecting the Dutch firm’s largest single-day share drop since 1998.
TSMC, during its Q3 profits announcement at 0600 GMT on Thursday, will provide updates on the current quarter and full-year outlooks, including expenditure, as it seeks to boost production. The chip manufacturer’s expansion strategy involves investing heavily in overseas factory construction, which includes $65 billion assigned to three plants in Arizona, USA. Most of its production, however, will remain in Taiwan.
During the last earnings conference in July, TSMC increased its revenue predictions and adjusted its annual capital expenditure to between $30 billion and $32 billion. This came up from the earlier forecast which stood between $28 billion to $32 billion. The last half of the year is usually the busiest time for tech firms in Taiwan as they strive to meet client demand before the year-end holiday season in key Western markets.
The surge in artificial intelligence has significantly contributed to a rise in the share value of TSMC, as evidenced by its Taipei-listed stock catapulting by 75% this year. This is notably more than the wider market’s progress, which has seen a 28% enhancement, taking its market capitalisation to approximately $840 billion.
TSMC, fondly known as the “guardian mountain of the nation” due to its vital contribution to Taiwan’s predominantly export-based economy, has little rivalry. However, both Samsung and Intel are striving to contest its supremacy. – Reuters
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