TSMC's third-quarter profit easily beat AI boom forecasts

1 in 2 people visited the TSMC Museum of Innovation in Hsinchu, Taiwan on May 29, 2024. REUTERS/An Wang/File photo

[1/2]People visit the TSMC Museum of Innovation in Hsinchu, Taiwan on May 29, 2024. REUTERS/Ann Wang/File Photo Purchase Licensing the rightA new tab opens

Third quarter profit T$325.3 billion (market forecast T$300.2 billion)
Q3 revenue jumped, beating market expectations
Earnings call at 0600 GMT on Thursday
TSMC will update the outlook for the current quarter, full year
Shares rose on strong AI-related demand

TAIPEI, Oct 17 (Reuters) – Taiwan Semiconductor Manufacturing Co (2330.TW)A new tab opensThe dominant producer of advanced chips used in artificial intelligence applications on Thursday forecast a 54% rise in third-quarter profit on the back of growing demand.

The world's largest contract chipmaker, whose customers include Apple ( AAPL.O ).A new tab opens and Nvidia ( NVDA.O )A new tab opensIndustries across the spectrum have benefited from the surge toward AI.

TSMC posted a net profit of T$325.3 billion ($10.11 billion) in the quarter ended Sept. 30, compared with T$300.2 billion forecast by an LSEG SmartEstimate polled from 22 analysts. SmartEstimates gives more weight to analysts' forecasts that are more consistently accurate.

TSMC, Asia's most valuable publicly listed company, said third-quarter revenue rose 36% year over year to $23.5 billion, better than the company's forecast of $22.4 billion to $23.2 billion. The company last week announced third-quarter earnings in Taiwan dollars, coming in at T$759.69 billion.

Capital spending in the third quarter was $6.4 billion, TSMC said, compared with $6.36 billion in the second quarter.

Tuesday, ASML (ASML.AS)A new tab opensThe world's largest supplier of chipmaking equipment to companies including TSMC forecast lower-than-expected 2025 sales and bookings on sustained weakness in parts of the chip market, pushing the Dutch firm's shares to their biggest one-day decline since 1998.

TSMC, in its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as the full year, including its capital spending, as it races to expand production.

The chipmaker is spending billions of dollars building new factories overseas, including $65 billion at three plants in the US state of Arizona, although it has said most manufacturing will remain in Taiwan.

In its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital spending plans for this year to between $30 billion and $32 billion, from a previous forecast of $28 billion to $32 billion.

The second half of the year is traditionally the peak season for Taiwanese tech companies as they compete to deliver to customers in major Western markets ahead of the year-end holiday season.

The AI boom has helped lift TSMC shares, with its Taipei-listed stock jumping 75% so far this year, compared with a 28% gain for the broader market (.TWII).A new tab opensGiving it a market capitalization of about $840 billion.

TSMC, referred to in Taiwan as the “holy mountain protecting the country” for its key role in Taiwan's export-dependent economy, faces little competition, though both Intel ( INTC.O )A new tab opens and Samsung (005930.KS)A new tab opens trying to challenge its dominance.

($1 = 32.1700 Taiwan dollars)

Reporting by Yimou Lee, Ben Blanchard and Faith Hung; Edited by Christopher Cushing and Muralikumar Anantharaman

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