Surging Profit: TSMC Exceeds Estimates, US-Listed Shares Climb
The third quarter profit of Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), the world’s largest contract semiconductor manufacturer, was higher than anticipated on Thursday due to the sustained demand from the artificial intelligence industry, which increased its top-line returns.
The chipmaker also expressed optimism for the current quarter, partially attributing this to enhanced capacity utilization. In premarket trading, the Taiwanese company’s shares that are listed in the United States experienced a surge of over 6%.
In a press release, TSMC reported a net profit of T$325.26 billion ($10.1 billion) for the three months ending September 30. The figure exceeded the T$300.2 billion estimate of Reuters.
Third-quarter revenue increased by 39% from the previous year to T$759.69 billion. According to CFO Wendell Huang, the fourth quarter revenue is anticipated to range from $26.1 billion to $26.9 billion, with a gross margin of 57% to 59%. Additionally, the annual revenue is anticipated to increase by approximately 30%.
The company stated that TSMC’s advanced 3-nanometer processors were the primary factor in the increase in sales, accounting for 20% of the overall revenue from wafers.
In a post-earnings webcast, CEO C.C. Wei stated, “We continue to observe extremely robust AI-related demand from our customers.”
The earnings report on Thursday was released mere days after ASML (NASDAQ:ASML), a semiconductor equipment manufacturer, disclosed a subpar sales forecast for 2025, which was partially attributable to the stagnant demand for chips from industries other than artificial intelligence.
This trend was evident in TSMC’s earnings, as revenue from its Digital Consumer Electronics sector, which produces chips for devices such as smart TVs and cameras, decreased by 19% quarter over quarter. However, this was substantially mitigated by an increase in revenue from its primary High-Performance Computing division. TSMC and ASML are both regarded as bellwethers for the semiconductor industry.
Among TSMC’s most significant clients are tech titans Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA). The enthusiasm surrounding the nascent technology has been particularly centered on Nvidia, a manufacturer of some of the most advanced AI processors in the market.
“The current AI movement could come to a halt,” stated Paul Marino, Chief Revenue Officer at Themes ETFs, “because there is no Nvidia without [TSMC].”
“TSMC is a major gauge of how quickly the AI movement and hyper data centers can be built out and how healthy supply dynamics are in the space.”
