Apple, Nvidia, AMD, Broadcom and Qualcomm among others, Semiconductor giant TSMC, has reported robust third-quarter earnings driven by the demand for AI chips. The company's net profits reached a record high of 452.3 billion new Taiwan dollars ($15 billion USD) in the three months ending in September, representing a 39.1% increase. TSMC, a leading contract foundry serving fabless chip designers, saw its revenue surge by 30% year-over-year.
TSMC's Q3 Earnings Exceed Expectations
The reported earnings surpassed the estimates of 417.7 billion new Taiwan dollars provided by LSEG SmartEstimate. The outlook for TSMC remains positive as it continues to cater to high-profile clients and invest in cutting-edge technologies such as AI and its new 2nm process node.
Nvidia's H20 AI accelerator chip is manufactured by TSMC. Image credit-Nvidia
Despite a slight dip in TSM's stock price, analysts remain optimistic about the company's growth prospects. Morningstar analysts believe that TSMC's strong position in the market, coupled with its advanced offerings, will shield it from potential challenges like tariffs on U.S. shipments.
Recent Partnerships to Drive Revenue Growth
With a projected increase in AI chip demand, TSMC has revised its revenue growth forecast for 2025 to the mid-30% range in U.S. dollars. The company also plans to maintain its substantial capital spending, with estimates reaching up to $42 billion for the current fiscal year.
Can TSMC's Growth Momentum be Sustained?
No. The company's trajectory is set to continue upwards.
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Yes. Breakthrough technologies could alter the landscape.
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Uncertain. Future developments will dictate the company's path.
TSMC's supremacy in the semiconductor industry is underpinned by the growing demand for AI applications. The company's collaborations with leading tech firms like Nvidia, AMD, and Broadcom are poised to drive substantial revenue and profit growth in the foreseeable future.
CEO C.C. Wei emphasized the sustained strength of AI demand and customer outlook, reinforcing the company's belief in the AI megatrend. Despite potential regulatory challenges, TSMC remains optimistic about the growth prospects of its AI business.
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