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TSMC is heavily investing in new manufacturing facilities, including $65 billion for three plants in Arizona, although the majority of its production will remain in Taiwan read more
 "TSMC to report quarterly profit increase of 30% as demand for AI chips grows exponentially")
TSMC, the world’s largest contract chipmaker, supplies major companies like Apple and Nvidia. This AI-driven demand has propelled TSMC's stock and the broader Taiwan market to new highs. Image Credit: Reuters
Major manufacturing businesses continue to cash in on the AI bandwagon that tech companies are riding on. After NVIDIA’s market cap breached the $3 trillion-figure, and eventually momentarily overtook Apple and Microsft as the most valuable company, Taiwan Semiconductor Manufacturing Co (TSMC) too, is seeing a surge in its fortune.
The Taiwanese chipmaker is anticipated to report a significant 30 per cent rise in second-quarter profit on Thursday, driven by a surge in demand for advanced chips used in artificial intelligence applications.
TSMC, the world’s largest contract chipmaker, supplies major companies like Apple and Nvidia. This AI-driven demand has propelled TSMC’s stock and the broader Taiwan market to new highs, with its American Depositary Receipts recently surpassing a trillion-dollar market value.
Analysts expect TSMC to report a net profit of $7.25 billion for the quarter ending June 30, up from $5.58 billion in the same period last year.
This estimate is based on the LSEG SmartEstimate, which prioritizes forecasts from the most consistently accurate analysts. Last week, TSMC already reported a significant increase in second-quarter revenue, exceeding market expectations.
Li Fang-kuo, Chairman of President Capital Management Co, expressed optimism about TSMC’s third-quarter outlook across all product lines. TSMC is set to provide updates on its quarterly earnings call on Thursday, where it will discuss its forecast for the current quarter and the full year, including capital expenditures as it expands production capacity.
TSMC is heavily investing in new manufacturing facilities, including $65 billion for three plants in Arizona, although the majority of its production will remain in Taiwan. In its previous earnings call in April, TSMC maintained its capital spending guidance for this year at $28 billion to $32 billion, with 70 per cent to 80 per cent allocated to advanced technologies.
Chu Yen-min, Chairman of KGI Securities Investment Advisory Co, suggested that TSMC might increase its capital spending due to several positive factors boosting its stock price and supporting the broader market. The AI boom has significantly driven up the value of TSMC’s shares, with its Taipei-listed stock soaring 75 per cent this year to record highs, compared to a 33 per cent rise in the broader market.
TSMC, often referred to as the “sacred mountain protecting the country” for its vital role in Taiwan’s economy, faces limited competition. However, rivals like Intel and Samsung are attempting to challenge its dominance in the chip manufacturing industry.
The financial community and the tech industry are closely watching TSMC’s performance and its strategic moves in the global market, particularly in light of its critical position in the rapidly growing AI sector.
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