TSMC's AI-fueled growth continues with record $23.6 billion quarterly profit
The Taiwanese chipmaker beat profit forecasts and expects revenue to climb as much as 61% in the fourth quarter. It is maintaining plans to spend up to $64 billion on capital investments this year as customers seek more advanced chips and packaging capacity.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker and a key manufacturer of advanced AI chips, said on Thursday that it expects fourth-quarter revenue to rise by as much as 61% from a year earlier, after reporting its sixth consecutive quarter of record earnings amid the AI boom.
The strong results should help ease concerns that the surge in AI investment is losing momentum. They came a day after ASML, the world's largest manufacturer of equipment used to produce advanced semiconductors, issued an upbeat outlook on demand for its chipmaking tools.
TSMC's Taipei-listed shares closed down 2% ahead of the earnings release, in line with a broader technology sell-off driven by concerns that further U.S. Federal Reserve interest rate hikes could weigh on AI stocks, which are sensitive to higher borrowing costs.
Shares of South Korean rivals Samsung Electronics and SK Hynix fell more than 10%.
Analysts say demand for TSMC's AI chip manufacturing capacity and its advanced chip-packaging technology, known as CoWoS, remains strong.
That demand has helped propel Asia's most valuable company, a key supplier to Nvidia and Apple, to new heights. TSMC's market capitalization stands at around $2 trillion, nearly twice that of Samsung Electronics.
TSMC reported net profit of T$763.1 billion ($23.59 billion) for the July-to-September quarter, up 69% from a year earlier and above the T$746.3 billion forecast in an LSEG SmartEstimate compiled from 16 analysts.
On an earnings call following the results, TSMC said it expects fourth-quarter revenue of $52.3 billion to $54.3 billion, compared with $33.73 billion a year earlier. The forecast implies year-on-year growth of approximately 55% to 61%.
The company maintained its 2026 capital expenditure forecast at $60 billion to $64 billion.
The quarter delivered TSMC's highest-ever net profit and marked its 11th consecutive quarter of year-on-year profit growth.
Last week, the company reported that third-quarter revenue had risen 50% from a year earlier, beating market forecasts and reaching a new record.
TSMC is investing $165 billion in chipmaking facilities in Arizona, including an additional $100 billion announced in July. In September, Reuters reported that the company was evaluating a potential investment in Texas. Tesla CEO Elon Musk also said last week that his companies would build and operate the Terafab AI chip complex, with TSMC potentially subleasing part of the facility.
On its July earnings call, TSMC raised its capital expenditure forecast for 2026 to $60 billion to $64 billion, from a previous estimate of $52 billion to $56 billion.
On Wednesday, ASML said customers were already looking to place orders for 2029 and 2030, easing concerns that the AI investment boom was losing momentum.
TSMC's Taipei-listed shares have gained 57% so far this year, broadly in line with a 62% rise in the wider Taiwanese market.
