TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co, the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 42% rise in third-quarter profit on Thursday thanks to increased demand.
The world’s largest contract chipmaker, whose clients include Apple and Nvidia, has benefited from a boom toward AI across a spectrum of industries.
TSMC will report a net profit of 300.1 billion Taiwan dollars ($9.33 billion) for the quarter ended Sept. 30, according to an LSEG SmartEstimate compiled by 23 analysts. SmartEstimates gives greater weight to forecasts from analysts who are more consistently accurate.
That estimate compares to third-quarter 2023 net income of C$211 billion.
TSMC last week reported an increase in Taiwan dollar-denominated third-quarter revenue, easily beating market expectations. It will provide fourth quarter revenue guidance in US dollars.
However, on Tuesday, ASML, the world’s largest supplier of chip manufacturing equipment to companies like TSMC, forecast lower-than-expected sales and bookings for 2025 due to sustained weakness in parts of the chip market, leading to shares of the Dutch company to its biggest one-day drop since 1998. .
On Wednesday, TSMC shares closed down 2.3% at C$1,045, though not far from their all-time high of C$1,080 reached on July 11.
TSMC, in its quarterly results conference call starting at 0600 GMT on Thursday, will update its outlook for the current quarter and 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 on three plants in the US state of Arizona, although it has said most manufacturing will remain in Taiwan. .
In its last earnings conference 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, compared with a previous forecast of $28 billion to $32 billion.
The second half of the year is traditionally the peak season for Taiwanese technology companies, which are racing to supply customers ahead of the end-of-year holiday season in major Western markets.
The rise of AI has helped boost the share price of Asia’s most valuable company, with Taipei-listed TSMC shares up 76% so far this year, compared with a gain of 28% for the market in general.
TSMC, known colloquially in Taiwan as the “sacred mountain that protects the country” for its pivotal role in Taiwan’s export-dependent economy, faces little competition, although both Intel and Samsung are trying to challenge its dominance.
($1 = 32.1740 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Christopher Cushing)