Key facts
- TSMC is expected to report a 65% surge in third-quarter net profit to T$746.3 billion ($23.4 billion).
- A result above T$706.56 billion would mark the company's highest-ever quarterly net income.
- TSMC's third-quarter revenue rose 50% year-on-year, reaching a new record high.
- Morgan Stanley analyst Charlie Chan expects TSMC to raise its full-year revenue growth forecast to the low-to-mid 40% range.
- TSMC is investing $265 billion to build chip factories in Arizona, including an additional $100 billion announced in July.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest maker of advanced AI chips, is poised to report its sixth consecutive quarter of record earnings on Thursday, fueled by robust spending on AI infrastructure. Analysts anticipate a significant increase in third-quarter net profit, driven by strong demand for TSMC's chipmaking capacity and its CoWoS advanced chip packaging technology.
Analysts surveyed by LSEG SmartEstimate project TSMC's third-quarter net profit to surge 65% year-on-year to T$746.3 billion ($23.4 billion). A profit exceeding T$706.56 billion would set a new quarterly record for the company, marking its 11th consecutive quarter of profit growth. Last week, TSMC announced a 50% year-on-year increase in third-quarter revenue, surpassing market expectations and reaching a new all-time high.
Morgan Stanley analyst Charlie Chan, in an October 6 report, predicted that TSMC would revise its full-year revenue growth forecast upward to the low-to-mid 40% range, from its current guidance of over 40%, citing strong demand for its 3-nanometer chips.
TSMC is undertaking a substantial investment of $265 billion to establish chip factories in Arizona, with an additional $100 billion commitment announced in July. The company is also reportedly evaluating a potential investment in Texas. Tesla CEO Elon Musk indicated that his companies might build and operate the Terafab AI chip complex, with TSMC potentially subleasing a portion of it. Analysts expect TSMC to provide updates on its expansion plans in Texas during its earnings call. Chan suggested that a Texas expansion could become necessary within five years due to growing customer demand and limited space at the Arizona site. However, Phelix Lee, senior equity analyst at Morningstar, viewed the urgency for a Texas expansion as limited, given that some Arizona fabs are yet to be constructed, suggesting Texas could be a location for longer-term expansion.