TSMC beat third-quarter profit expectations as AI boom surged 54%

The Taiwanese semiconductor manufacturing company reported a 54% jump in net profit on Thursday, as global chipmakers benefit from demand boosted by AI applications.

The company had net income of 352.3 billion Taiwanese dollars ($10.1 billion) in the July-September quarter, beating the LSEG estimate of $300.2 billion Taiwanese dollars cited by Reuters.

TSMC is the world's largest manufacturer of advanced chips, serving clients such as apple And Nvidia.

Net revenue came in at $23.5 billion in the third quarter, up 36% year over year, TSMC's gross margin rose to 57.8% in July-September, up from 54.3% in the same period last year.

In the third quarter, “our business was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies,” TSMC said in a statement, referring to its semiconductor nodes.

The company's Taipei-listed shares are up nearly 75% year to date.

TSCM's capital spending rose to $6.4 billion in the third quarter, up from $6.36 billion in the previous three months.

The Taiwanese chipmaker, whose advanced chips are vital to many products from smartphones to AI applications, is expanding its manufacturing presence globally with a massive foreign investment of $40 billion for two chip plants in Arizona to meet US demand. As well as opening its first factory in Japan earlier this year.

TSMC's earnings beat comes in the same week as the Netherlands-based ASMLThe Taiwanese company, which supplies machines, issued a lower-than-expected net sales forecast, sending shares tumbling.

Some market participants have questioned the long-term sustainability of the AI ​​boom and the return on increased investment in the technology sector — while Yong Liu, CEO and chairman of major Apple supplier Foxconn, told CNBC last week that the AI ​​frenzy “still has some way to go,” as advanced language models each Evolves with new iterations.

This breaking news story is being updated.