Chinese chip giant Taiwan Semiconductor Manufacturing Company (TSMC) announced a 39% increase in profit in the third quarter of the year, significantly exceeding analysts’ estimates and reaching a new profit record, thanks to strong demand for artificial intelligence chips. The TSMC stock soared on the Taiwan Stock Exchange and also recorded large gains in the pre-market circuit of the US market, the second main listing market, helping to fuel purchases in the semiconductor sector.
The numbers for the 3rd quarter
TSMC closed the third quarter of the year with revenue up 30.3% to 989.92 billion New Taiwan dollars (TWD), versus the 977.46 billion expected by analysts. Net profit rose to 452.3 billion TWD, up 39.1% compared to the previous year and 13.7% compared to the record of the previous quarter, above the 417.69 billion consensus.
The support of AI
TSMC’s achievements have been driven by the artificial intelligence boom, providing advanced AI processors for customers such as Nvidia and Apple.
“Recent developments in the AI market continue to be very positive”
said Group President and CEO Che-Chia Wei in a conference call on financial results, adding
“Our belief in the AI megatrend is strengthening.”
The number one of TSMC confirmed that the wider demand for products related to artificial intelligence has led to a greater demand for processing products and therefore to a greater demand for semiconductors suitable for AI.
TSMC’s high-performance computing division, which includes artificial intelligence and 5G applications, accounted for the majority of sales in the July-September quarter, accounting for 57% of revenue. The company then reported that advanced chips, measuring 7 nanometers or less, accounted for 74% of TSMC’s total revenue in the quarter.
Forecasts revised upwards
The Taiwanese company also revised its growth forecasts for the current year upwards, indicating dollar revenue rising by an average of 30%, and confirmed investment spending at $42 billion. Based on the current outlook, TSMC also expects fourth-quarter revenues of between $32.2 billion and $33.4 billion. Gross margin is expected between 59% and 61%, while operating margin is expected to range between 49% and 51%.
TSMC shares rally in Asia and USA
Shares of TSMC in Taiwan jumped 2.8%, bringing their year-to-date gain to more than 38%. Shares listed in New York are also rising in the pre-market circuit by 2.18% after closing yesterday’s session up by almost 3%. In the last year, the stocks listed on the NYSE have increased by around 40%.
