Taiwan Semiconductor Manufacturing Co (TSMC) , the world’s largest contract chipmaker, reported a 54% jump in quarterly profit , surpassing forecasts, thanks to soaring demand for AI-related chips . This robust performance underscores TSMC’s dominance in producing advanced chips for AI applications, with key customers like Apple and Nvidia . TSMC's net profit for 3Q2024 reached T$325.3 billion (US$10.11 billion) , exceeding the T$300.2 billion forecasted by analysts. The company's revenue rose 36% year-on-year to US$23.5 billion , driven by strong demand for smartphone and AI chips utilizing its cutting-edge 3nm and 5nm technologies . The AI boom has been a major growth driver, with AI processors expected to account for a mid-teens percentage of TSMC's overall revenue for 2024. TSMC's capital spending for the current quarter is set to more than double to US$11.5 billion , and it expects capital expenditure to increase further in 2025 as demand remains robust. Chai
Bernard Arnault, the controlling shareholder of LVMH, has lost $37 billion from his fortune over the past 18 months, as a slump in Chinese demand for luxury goods hits the company's performance. LVMH, the world’s largest luxury conglomerate, has seen its market capitalization drop by more than €150 billion ($163 billion), pushing Arnault to fifth place on the Bloomberg Billionaires Index, down from his previous position as the world’s wealthiest person.
The downturn in luxury demand, particularly in China, has led to LVMH’s fashion and leather goods unit posting its first quarterly sales decline since the early stages of the pandemic in 2020. The drop in demand has been driven by concerns over China’s weak property market and uncertain employment outlook, prompting a decline in consumer confidence. Despite a stimulus package launched by Chinese authorities, there has been little improvement in consumer spending.
LVMH’s share price fell by 7.5% on Wednesday, reaching a two-year low. The broader luxury sector, including brands like Hermes and Kering, is also facing challenges, with results expected to reflect the same downward trend.
The US market has now become increasingly important for LVMH, as the share of revenue from Asia excluding Japan has dropped from 32% to 29%, while the US share has risen to 25%. However, LVMH faces further risks from trade tensions, particularly with Donald Trump’s potential re-election and his proposed tariff increases, which could impact Hennessy and other French exports.
On top of these challenges, LVMH and Arnault are facing political pressures at home, with the French government planning to impose higher taxes on the country’s wealthiest citizens and largest corporations, including LVMH, as part of efforts to reduce France’s budget deficit.
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