TSMC is predicted to report a 40% increase in third-quarter profits, following rising demand for AI chips.
Key Takeaways
- TSMC is predicted to report a 40% increase in third-quarter profits.
- The chipmaker’s expected profit for the quarter ending is around $9.27 billion.
- Li said, “TSMC’s Q3 earnings will exceed expectations by a lot.”
- The price of shares in Asia’s leading firm has increased.
- TSMC revised its capital expenditure intentions for this year to between $30 billion and $32 billion.
The world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), is predicted to report a 40% increase in third-quarter profits, fueled by rising demand for AI chips.
The boost benefits TSMC’s customers. It is not unexpected that the rise can be attributed to its vital role in developing cutting-edge semiconductors for technological companies such as Apple and Nvidia.
A 22 analyst of SmartEstimate forecast says that the chipmaker’s expected profit for the quarter ending September 30 is around T$298.2 billion ($9.27 billion).
This forecast compares to T$211 billion in net profit for the third quarter of 2023.
Chairman of President Capital Management, Li Fang-Kuo,
“Most of TSMC’s major clients, including Apple, Nvidia, AMD, Qualcomm, and MediaTek, are launching new products which heavily rely on TSMC’s advanced process technologies.”
He added,
“TSMC’s Q3 earnings will exceed expectations by a lot.”
TSMC is investing billions of dollars in new factories overseas, including $65 billion for three sites in Arizona, yet the majority of manufacturing will remain in Taiwan.
The price of shares in Asia’s leading firm has increased due in part to AI growth. TSMC’s Taipei-listed stock this year has risen 77%, while the market as a whole has gained 28%.
TSMC revised its capital expenditure intentions for this year to between $30 billion and $32 billion, increasing from a previous estimate of $28 billion to $32 billion, and raised its full-year revenue prediction in its most recent results report in July.
TSMC, located in Hsinchu and called the “sacred mountain protecting the country” due to its critical position in Taiwan’s export-oriented economy, confronts minimal competition.
Five-decade-old Intel was once the largest company in the semiconductor business. Now, it is going through one of its worst times as losses rise at the contract manufacturing facility it is setting up in an attempt to compete with TSMC.
Taiwan is rising as a leading power in the geopolitical and economic sectors as semiconductor technology becomes more vital globally. It influences both the tech industry and global trade patterns. Furthermore, TSMC’s US expansion is a planned move that supports Western technology policies and may assist in alleviating future geopolitical tensions in the region.
The rise in profits underscores the growing significance of AI technologies across various industries as companies scramble to secure more powerful and efficient chips to power AI-driven applications. Recently, AMD also launched an AI chip called MI325X against its rival Nvidia’s Blackwell.
For more AI, cyber security, and digital marketing insights, visit Daily Digital Grind.
If you’re interested in contributing, check out our Write for Us page to submit your guest posts!