Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest manufacturer of advanced artificial intelligence (AI) chips, is expected to post a 28 percent jump in third-quarter profit to a record due to the insatiable demand for AI infrastructure, though US tariffs could impact its outlook.
TSMC, the world’s No. 1 contract chipmaker and a key supplier to Nvidia Corp and Apple Inc, is forecast to report a net profit of NT$415.4 billion (US$13.55 billion) for the three months through Sept. 30, according to an LSEG SmartEstimate compiled from 20 analysts.
SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate.
Photo: Ritchie B. Tongo, EPA
TSMC has already flagged a market-forecast-beating rise in third-quarter revenue of 30 percent. Any profit result above NT$398.3 billion would mark the company’s highest-ever quarterly net income and its seventh consecutive quarter of profit growth.
Mario Morales, group vice president at research firm IDC, said he expects TSMC’s revenue to grow at least 30 percent to 35 percent this year.
"I am expecting that TSMC will continue to outperform its peers given the ongoing exponential growth of AI infrastructure investments and that the leading chip suppliers such as Nvidia and AMD [Advanced Micro Devices Inc] have only one place to go — TSMC," he said.
Morales said that even as tariffs and trade disputes add uncertainty, AI infrastructure remains a "strategic land grab" for cloud-service providers, manufacturers and companies, ensuring investment continues to concentrate in that space.
TSMC, Asia’s most valuable listed company with a market capitalization of around US$1.22 trillion — nearly three times that of South Korean rival Samsung Electronics Co — is due to report on Thursday and will provide fourth-quarter guidance in an earnings call.
It remains unclear how much US President Donald Trump’s tariffs will affect TSMC. Taiwan’s exports to the US are currently subject to a 20 percent tariff, but that excludes chips.
US Secretary of Commerce Howard Lutnick proposed last month that Taiwanese companies split their production of chips 50-50 between Taiwan and the US, compared to the current setup where the vast majority of the production is in Taiwan.
Taiwan has rejected that idea, and TSMC is already investing US$165 billion building factories in the US in Arizona.
Shares in TSMC have gained 30 percent so far this year on optimism over AI, largely brushing off tariff concerns. The heavyweight’s rise has powered the benchmark TAIEX’s 16.9 percent advance over the same period.
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