Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 54% increase in quarterly net income, exceeding market expectations, thanks to robust sales of AI chips from key clients like Nvidia Corp.
This surge helped offset weaker demand from the mobile industry, positioning TSMC as a major beneficiary of the ongoing AI boom.
For the September quarter, TSMC posted a net profit of NT$325.3 billion ($10.1 billion), surpassing analysts’ average estimates of NT$299.3 billion. This impressive performance followed a 39% rise in revenue during the same period. The company’s shares have risen more than 70% this year, reflecting high investor confidence in TSMC’s ability to capitalize on growing demand for AI infrastructure from major tech companies like Microsoft and Amazon.
TSMC’s American depositary receipts (ADRs) rose 4.5% in overnight trading on Robinhood’s platform, a sign of strong interest from US retail investors betting on the AI chip market.
Despite some concerns over a slowdown in global chip demand, particularly in the mobile and automotive sectors, TSMC remains optimistic about its outlook. The company raised its revenue forecast for 2024, expecting sustained growth fueled by the continued adoption of AI technologies, as well as ongoing demand for advanced chips used in iPhones and other gadgets.
While TSMC’s performance contrasts with challenges faced by other industry players like ASML Holding NV, which recently reported weaker-than-expected orders, analysts remain confident in TSMC’s strong position. Its advanced 2- and 3-nanometer chip technologies and superior manufacturing capabilities have provided a competitive edge in a rapidly evolving market.
TSMC is also expanding its global presence, with new plants under construction in Japan, Germany, and Arizona, further enhancing its ability to meet rising demand for AI chips and other advanced technologies.
CNBC, Bloomberg, and the Wall Street Journal contributed to this report.
