TSMC Optimistic on Future as AI Boom Drives Q3 Profit Beyond Expectations

TSMC exceeds Q3 profit forecasts, fueled by the AI boom, with a positive outlook for future growth and strong market demand.

October 17, 2024 1:00 PM

2 MIM

Daria Dondea

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TSMC

SMC, the largest contract chipmaker in the world, is set to maintain its growth, after this Thursday, the company made public a forecast talking

about a 54% growth in their quarterly profit. The growth is directly linked to the growing demand for artificial intelligence and AI chips.

Taiwan Semiconductor Manufacturing Co – TSMC – is the most dominant producer of top-notch AI chips that are used especially in AI apps. Among its most notorious customers, we can find Apple and Nividia as it benefited from the upsurge toward a future dependent on Artificial intelligence in more and more industries.

TSMC's last prediction regarding its spending in the actual tech environment is to be more than double meaning around $11.5 billion, foreseeing an expanding budget. Even more so, they reported that 2024 full-year revenue will have a %30 growth in the US, in comparison with older guidance of a little over the mid-20 % range.

Even more so, TSMC talked about its revenue from AI processors which is set to account for its overall yearly revenue. C.C. Wei, the chairman of the corporation said “The demand is real," referring to how artificial intelligence is shaping the way we see the tech industry.

This Thursday, at the quarterly earning call, TSMC said that it is expecting an expectation from its capital, expecting a slightly larger number of over $30 billion, in comparison with their previous forecast of $30-32 billion.

One of the fund managers of Fuh Hwa Securities Investment Trust, talked about TSMC, saying that any concerns about the industry had vanished with TSMC earnings. He said “TSMC is a dominant company," and that "It is the only one with advanced process technologies that won't be found at companies like Intel or Samsung.".

In order to remain one of the biggest chip providers, TSMC is building new factories and expediting their work overseas, building three new plants in the U.S. state of Arizona with a $65 billion investment. For the fourth quarter expecting $26.1 billion, compared with last year's expected revenue for Q4 – $19.62 billion.

The third quarter revenue rose to 36% year-on-year getting them to $23.5 billion, better than any of the company’s forecasts. The company announced last week that its third-quarter revenue in Taiwan dollars – T$759,69 billion.

Wendall Huang, TSMC’s CFO said in an earnings call “Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies," and that “Moving into the fourth quarter of 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies.”

TSMC plays a crucial role in Taiwan’s export-dependent economy as it faces little competition even though both Samsung and Intel are challenging its dominance.