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.
Chairman and CEO CC Wei expressed confidence in continued AI demand, stating that the "demand is real" and expected to persist for many years. The company expects full-year revenue growth of close to 30% in US dollar terms, surpassing its previous guidance of mid-20% growth.
TSMC’s stock surged more than 8% in premarket trading, and if these gains hold, the company’s market capitalization is set to surpass US$1 trillion.
Looking ahead, TSMC forecasted fourth-quarter revenue between US$26.1 billion and US$26.9 billion, a significant jump from US$19.62 billion in the same period of 2023, and expects continued strong demand for its advanced process technologies in the years to come.
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