BUSINESS-ECONOMY
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is poised to announce a remarkable 40 per cent increase in its third-quarter profit, driven by surging demand for artificial intelligence (AI) chips. Analysts predict that TSMC will report a net profit of T$298.2 billion (approximately $9.27 billion) for the quarter ending September 30, a significant rise from T$211 billion reported in the same period last year as detailed in a report by Reuters. It is also important to note that, $1 = 32.1570 Taiwan dollars. Strong demand from major clients The anticipated profit boost reflects the growing reliance on TSMC’s advanced semiconductor technologies by major clients such as Apple, Nvidia, AMD, Qualcomm, and Mediatek. According to Li Fang-kuo, chairman of President Capital Management, “Most of TSMC's major clients are launching new products which heavily rely on TSMC's advanced process technologies.” This trend underlines the critical role that TSMC plays in the tech industry, particularly as companies pivot towards AI-driven solutions. In addition to its impressive profit forecast, TSMC recently reported a surge in third-quarter revenue that exceeded market expectations. The company is set to provide further insights into its financial outlook during its upcoming earnings call scheduled for Thursday at 0600 GMT. Expansion plans amidst AI boom To meet the escalating demand for its products, TSMC is investing billions in expanding its manufacturing capabilities. The company has earmarked $65 billion for the construction of three new plants in Arizona, USA; however, it has indicated that most of its manufacturing operations will continue to be based in Taiwan. In July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, up from an earlier estimate of $28 billion to $32 billion. The AI boom has significantly impacted TSMC's stock performance as well. The company's shares have surged by 77 percent this year alone, far outpacing the broader market's 28 percent gain. This remarkable growth highlights TSMC's dominance in the semiconductor industry at a time when competitors like Intel are struggling with mounting losses in their contract manufacturing unit. Hence, as TSMC prepares to unveil its third-quarter results, all eyes will be on how it plans to navigate the rapidly evolving landscape of AI technology and semiconductor manufacturing. With little competition on the horizon and a robust client base driving demand, TSMC appears well-positioned for continued growth in the coming quarters. A journalist, writing for the WION Business desk. Bringing you insightful business news with a touch of creativity and simplicity. Find me on Instagram as Zihvee, tr None
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