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
Global stocks fell on Wednesday after disappointing earnings reports from European giants LVMH and ASML, while the US dollar strengthened on expectations of a more gradual decline in US interest rates.
ASML, a key supplier to chipmakers like TSMC and Samsung, reported a gloomy 2025 sales forecast, citing prolonged weakness in the semiconductor market outside AI. Its shares plunged, falling by the most in nearly 30 years and losing another 5% early Wednesday. Meanwhile, LVMH, heavily reliant on Chinese consumers, saw its shares drop after weaker-than-expected Q3 sales, pulling down the CAC 40 and STOXX 600 indices.
Adding to the pressure, a Bloomberg News report revealed that US officials are considering a cap on AI chip exports to specific countries, further dragging down major chip indices in Japan, Taiwan, and South Korea.
In the US, S&P 500 and Nasdaq futures were flat after Tuesday’s decline, but Michael Brown, market strategist at Pepperstone, suggested that dips might be good buying opportunities if banks perform well.
As US elections loom, analysts warned of increased market volatility. With inflation slowing in the UK and expectations for the Bank of England to cut rates, the pound fell below US$1.30, while the FTSE 100 rose 0.6%.
The US dollar has surged due to expectations for Federal Reserve rate cuts being revised down from 80 bps to 46 bps. The US dollar index remains near its highest level since August.
In commodities, oil prices remained steady following a 5% decline amid Middle East tensions and uncertainties around global supply. Brent crude futures rose 0.3% to US$74.44 a barrel.
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