TSMC's Record-Breaking Performance Fueled by AI Boom, Outshining Rivals

TSMC stock hits new high while rival Samsung stumbles

STORY: Two Asian chipmaking giants had a Friday (October 18) to remember, but for different reasons. Taiwan's TSMC saw shares rocket to record levels, but Samsung had a disappointing day. Investors were excited after TSMC posted forecast-beating earnings for the third quarter the day before. It reported a 54% jump in quarterly profit - beyond analyst projections. The world's largest chipmaker for other companies also gave a strong outlook for artificial intelligence demand. Its shares closed up almost 5% Friday - beating a record set earlier this year. TSMC counts Apple and Nvidia among its customers, and has benefited from a surge in AI's popularity. It's now Asia's most valuable company - worth around $874 billion. Rival Samsung had a very different feel on Friday. Sources said the South Korean giant postponed taking deliveries of chipmaking equipment from Dutch firm ASML. The sources added the machines were supposed to be delivered to Samsung's upcoming factory in Texas. But they said the South Korean firm has yet to win any major customers for the project. The delay is a blow to the ambitions of chairman Jay Y. Lee to expand beyond memory chips into contract chip manufacturing. TSMC dominates that market, and the gulf with Samsung could be widening as the Taiwanese firm ramps up production.

TSMC Shares Hit All-Time High on Record Results, Strong Outlook -- Update

Taiwan Semiconductor Manufacturing Co.'s shares closed at an all-time high after the company reported record quarterly results and guided for another strong quarter, a reassuring sign that its growth momentum will continue and the artificial-intelligence boom is real. Shares of the world's largest contract chip maker advanced 4.8% on Friday to end at 1,085 New Taiwan dollars, equivalent to US$33.77, surpassing the previous record close of NT$1,080 in July. The index heavyweight's gains sent Taiwan's Taiex 1.9% higher. The company's American depositary receipts jumped 9.8% on Wall Street overnight. TSMC's third-quarter net profit surged 54% to the equivalent of US$10.12 billion, topping market consensus, with the gross margin reaching 57.8%, exceeding its own high-end guidance of 55.5%. The results were an "amazing beat," Citi analysts led by Laura Chen said, thanks to strong AI demand, solid execution and a better utilization rate in advanced nodes. Demand for TSMC's 3-nanometer chips soared in the third quarter, with their revenue contribution rising to 20% from 15% in the second quarter and 6% in the year-ago period. "This is driven by AI [graphics processing units] demand and recent flagship smartphone launches across both iPhone and Android," DBS analyst Jim Au said in a note. The company guided for fourth-quarter revenue of US$26.1 billion to US$26.9 billion, with the gross profit margin expected between 57% and 59%. Citi analysts said that TSMC's gross margin has the potential to rise further into next year, driven by revenue contribution from advanced chips and improved yields with 3-nanometer chips. That trend is evident even after considering factors such as rising electricity costs and overseas fab operations, they wrote in a research note. TSMC's high-performance computing segment, which includes AI chips, made up 51% of overall revenue in the third quarter. The company expects its revenue from AI-related servers and processors to triple this year, accounting for about 15% of its total revenue. Major TSMC chip-equipment supplier ASML reported poor results earlier this week and warned that while demand for AI remained strong, the recovery in some parts of the industry may stretch into next year. The situation bodes well for TSMC, Morningstar analyst Phelix Lee said in a note. With Samsung and Intel--the Taiwanese company's main rivals in the foundry business--struggling to advance their chip-making technology and expected to cut costs, TSMC could demand lower lithography machine prices and improve its cash flow further, Lee said.

TSMC stock hits new high after posting forecast-beating earnings

TAIPEI (Reuters) - Taipei-listed shares in TSMC hit a record high on Friday after the chipmaker posted forecast-beating third-quarter earnings and predicted a rosy outlook on strong artificial intelligence (AI) demand. Shares jumped 6% shortly after opening to reach T$1,100 ($34.25), surpassing the previous record of T$1,080 hit on July 11. That gave TSMC a market capitalisation of around $884 billion, the most of any company listed in Asia. The company, however, appeared to face some political uncertainty after U.S. media outlet The Information said the U.S. Department of Commerce is probing whether TSMC has been making AI or smartphone chips for China's Huawei, whose access to non-Chinese chips has been severely curtailed due to U.S. export controls. As the world's largest contract chipmaker, TSMC, whose customers include Apple and Nvidia, has benefited from a surge towards AI across a spectrum of industries. On its earnings call on Thursday, Taiwan Semiconductor Manufacturing Co (TSMC) reported a forecast-beating 54% jump in quarterly profit, raised its revenue forecast for the year and said the next five years would also be "healthy" for the firm. Venson Tsai, an analyst at Cathay Futures Consultant in Taipei, said the stock could go higher still. "TSMC's share price hasn't fully reflected the rising wave of AI long term," he said. Following the media report about the U.S. probe, TSMC said in a statement on Friday that it was a law abiding company and committed to complying with laws and regulations, including export controls. "If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties including customers and regulatory authorities as necessary," it said. (Reporting by Ben Blanchard; Additional reporting by Karen Freifeld in Washington; Editing by Muralikumar Anantharaman)

TSMC stock hits new high after posting forecast-beating earnings

TAIPEI, Oct 18 (Reuters) - Taipei-listed shares in TSMC (2330.TW), opens new tab hit a record high on Friday after the chipmaker posted forecast-beating third-quarter earnings and predicted a rosy outlook on strong artificial intelligence (AI) demand. Shares jumped 6% shortly after opening to reach T$1,100 ($34.25), surpassing the previous record of T$1,080 hit on July 11. That gave TSMC a market capitalisation of around $884 billion, the most of any company listed in Asia. Advertisement · Scroll to continue The company, however, appeared to face some political uncertainty after U.S. media outlet The Information said the U.S. Department of Commerce is probing whether TSMC has been making AI or smartphone chips for China's Huawei (HWT.UL), whose access to non-Chinese chips has been severely curtailed due to U.S. export controls. As the world's largest contract chipmaker, TSMC, whose customers include Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab, has benefited from a surge towards AI across a spectrum of industries. Advertisement · Scroll to continue On its earnings call on Thursday, Taiwan Semiconductor Manufacturing Co (TSMC) reported a forecast-beating 54% jump in quarterly profit, raised its revenue forecast for the year and said the next five years would also be "healthy" for the firm. Venson Tsai, an analyst at Cathay Futures Consultant in Taipei, said the stock could go higher still. "TSMC's share price hasn't fully reflected the rising wave of AI long term," he said. Following the media report about the U.S. probe, TSMC said in a statement on Friday that it was a law abiding company and committed to complying with laws and regulations, including export controls. "If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties including customers and regulatory authorities as necessary," it said. The U.S. Commerce Department declined to comment. ($1 = 32.1190 Taiwan dollars) Reporting by Ben Blanchard; Additional reporting by Karen Freifeld in Washington; Editing by Muralikumar Anantharaman Our Standards: The Thomson Reuters Trust Principles., opens new tab

TSMC Shares Rise on Record Results, Strong Outlook Amid AI Boom

Taiwan Semiconductor Manufacturing Co.'s shares rose sharply after it reported record quarterly results and guided for another strong quarter, a reassuring sign that its growth momentum will continue and the artificial-intelligence boom is real. Shares of the world's largest contract chip maker advanced 5.8% early Friday, on track for their largest percentage gain in more than two months. The index heavyweight's gains sent Taiwan's Taiex 2.5% higher in early trading. TSMC's third-quarter net profit surged 54% to the equivalent of $10.12 billion, topping market consensus, with the gross margin reaching 57.8%, exceeding its own high-end guidance of 55.5%. The results were an "amazing beat," Citi analysts led by Laura Chen said, thanks to strong AI demand, solid execution and a better utilization rate in advanced nodes. The company guided for fourth-quarter revenue of $26.1 billion to $26.9 billion, with the gross profit margin expected between 57% and 59%. Citi analysts said that TSMC's gross margin has the potential to rise further into next year, with more revenue contribution from advanced chips and much better yields with the 3-nanometer chips. That trend is evident even after considering factors such as rising electricity costs and overseas fab operations, they wrote in a research note. TSMC's high-performance computing segment, which includes AI chips, made up 51% of overall revenue in the third quarter. The company expects its revenue from AI-related servers and processors to triple this year, accounting for about 15% of its total revenue. Major TSMC chip-equipment supplier ASML reported poor results earlier this week and warned that while demand for AI remained strong, the recovery in some parts of the industry may stretch into next year. The situation bodes well for TSMC, Morningstar analyst Phelix Lee said in a note. With Samsung and Intel--the Taiwanese company's main rivals in the foundry business--struggling to advance their chip-making technology and expected to cut costs, TSMC could demand lower lithography machine prices and improve its cash flow further, Lee said.

TSMC set to report strong profit driven by AI boom

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co, the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 42% leap in third-quarter profit on Thursday thanks to soaring demand. The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a surge towards AI across a spectrum of industries. TSMC is set to report a net profit of T$300.1 billion ($9.33 billion) for the quarter ended Sept. 30, according to an LSEG SmartEstimate drawn from 23 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 third-quarter net profit of T$211 billion. TSMC last week reported a jump in Taiwan-dollar denominated third-quarter revenue, easily beating market expectations. It will give fourth-quarter revenue guidance in U.S. dollars. However, on Tuesday, ASML, the world's biggest chipmaking equipment supplier to companies including TSMC, forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the chip market, pushing the Dutch firm's shares to their biggest one-day drop since 1998. On Wednesday, TSMC's shares closed down 2.3% at T$1,045, though not far off their historic high of T$1,080 hit on July 11. TSMC, at its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure, as it races to expand production. The chipmaker is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it has said most manufacturing will remain in Taiwan. On its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, compared with a previous forecast of $28 billion to $32 billion. The second half of the year is traditionally the peak season for Taiwanese tech companies as they race to supply customers ahead of the year-end holiday season in major Western markets. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock leaping 76% so far this year, compared with a 28% gain for the broader market. TSMC, colloquially referred to in Taiwan as the "sacred mountain protecting the country" for its critical role in Taiwan's export-dependent economy, faces little competition, though both Intel and Samsung are trying to challenge its dominance. (Reporting by Ben Blanchard; Editing by Christopher Cushing)

TSMC set to report strong profit driven by AI boom

TAIPEI, Oct 17 (Reuters) - Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 42% leap in third-quarter profit on Thursday thanks to soaring demand. The world's largest contract chipmaker, whose customers include Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab, has benefited from a surge towards AI across a spectrum of industries. TSMC is set to report a net profit of T$300.1 billion ($9.33 billion) for the quarter ended Sept. 30, according to an LSEG SmartEstimate drawn from 23 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. Advertisement · Scroll to continue That estimate compares to the 2023 third-quarter net profit of T$211 billion. TSMC last week reported a jump in Taiwan-dollar denominated third-quarter revenue, easily beating market expectations. It will give fourth-quarter revenue guidance in U.S. dollars. However, on Tuesday, ASML (ASML.AS), opens new tab, the world's biggest chipmaking equipment supplier to companies including TSMC, forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the chip market, pushing the Dutch firm's shares to their biggest one-day drop since 1998. Advertisement · Scroll to continue On Wednesday, TSMC's shares closed down 2.3% at T$1,045, though not far off their historic high of T$1,080 hit on July 11. TSMC, at its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure, as it races to expand production. The chipmaker is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it has said most manufacturing will remain in Taiwan. On its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, compared with a previous forecast of $28 billion to $32 billion. The second half of the year is traditionally the peak season for Taiwanese tech companies as they race to supply customers ahead of the year-end holiday season in major Western markets. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock leaping 76% so far this year, compared with a 28% gain for the broader market (.TWII), opens new tab. TSMC, colloquially referred to in Taiwan as the "sacred mountain protecting the country" for its critical role in Taiwan's export-dependent economy, faces little competition, though both Intel (INTC.O), opens new tab and Samsung (005930.KS), opens new tab are trying to challenge its dominance. ($1 = 32.1740 Taiwan dollars) Reporting by Ben Blanchard; Editing by Christopher Cushing Our Standards: The Thomson Reuters Trust Principles., opens new tab

TSMC Stock Jumps on AI-Fueled Earnings Surge

TSMC also reported a 39% jump in revenue to NT$759.69 billion ($23.64 billion) and a 57.8% gross margin, beating analysts' estimates and its own guidance for both. U.S.-listed Taiwan Semiconductor Manufacturing Co. (TSM) shares are jumping 8% in premarket trading after the chipmaker posted robust quarterly earnings and projected a buoyant outlook on the back of the artificial intelligence (AI) boom. The company, which supplies tech heavyweights such as Apple (AAPL) and Nvidia (NVDA), reported a 54% year-over-year rise in third-quarter net income of 325.26 billion New Taiwan dollars ($10.12 billion), up from NT$211 billion. The profit figure by the world's largest contract chip manufacturer beat the NT$300.78 billion consensus estimate of analysts polled by Visible Alpha. TSMC also reported a 39% jump in revenue to NT$759.69 billion ($23.64 billion) for the quarter and a 57.8% gross margin, above analysts' estimates and the guidance it gave for both in the second quarter. "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies," TSMC Chief Financial Officer (CFO) Wendell Huang said. "Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies."

TSMC profits jump 54% on back of AI chip boom

Taiwan Semiconductor Manufacturing Company, the world's largest chipmaker, has further raised its growth outlook on the back of an artificial intelligence boom and a broad-based recovery in other sectors, defying market jitters over the current industry upcycle's longevity. "We continue to observe extremely robust AI-related demand," CC Wei, chair and chief executive, told investors on Thursday, adding that TSMC expected revenue to grow nearly 30 per cent this year. The bullish guidance came as the Taiwan-based company reported a 54 per cent year-on-year jump in net profit to NT$325.3bn (US$10.1bn) for the third quarter, exceeding its forecast from three months ago. It followed a tech sell-off after ASML, the Dutch company that supplies the lithography machines used to make the world's most advanced chips, reported orders that were half of analysts' expectations. TSMC, which dominates production of cutting-edge semiconductors, appears to be isolated from that weakness. Pointing to almost all the companies that design AI chips being its customers, including so-called hyperscalers such as Amazon and Microsoft, Wei said: "We probably get the deepest and widest look. The demand is real, and I believe it is just the beginning and will continue for many years." The company expects the contribution of AI-related chips to revenue to triple to 15 per cent this year compared with 2023. But TSMC said its strong third-quarter performance -- with revenue, gross margins and operating margins all exceeding earlier guidance -- was also supported by a recovery in demand across all segments, from smartphones to industrial applications and car chips. The company remains slightly cautious on investment plans in new capacity. Capital expenditure is "very likely" to be higher in 2025 than this year, probably slightly above $30bn, TSMC said. But it has only spent $18.5bn as of the end of September, far below its full-year forecast of up to $30bn. A sizeable chunk of spending on advanced capacity -- which typically accounts for more than 70 per cent of TSMC's capex -- flows into ASML machines. Analysts said ASML's weak third-quarter orders were more likely due to Intel and Samsung, which are both struggling to keep up in chip manufacturing for external customers. TSMC produces chips for more than 500 companies, including Nvidia's latest AI processors and Apple's iPhone chips, a business model that gives it unrivalled scale and balance. "While ASML delivered a negative update, TSMC continues to go from strength to strength," said Ben Barringer, technology analyst at Quilter Cheviot. "This is encouraging and has resulted in TSMC raising its guidance, giving the sector confidence again after ASML's news." He stressed that with its stable business outside AI, TSMC was much better positioned than Intel and Samsung. "Should any real downturn hit the sector, it should be in a strong position to weather this and emerge in a good place," he said.

TSMC Posts Record Profit as AI Boom Continues -- Update

Taiwan Semiconductor Manufacturing Co. reported record net profit for the third quarter, driven by strong demand for smartphone and artificial-intelligence chips, dispelling concerns about the sustainability of the AI boom. The world's largest contract chip maker said Thursday that quarterly net profit surged 54% from a year earlier to 325.26 billion New Taiwan dollars, equivalent to US$10.10 billion. That topped the NT$298.00 billion consensus estimate from a FactSet poll of analysts. TSMC's revenue was also a record, rising 39% to NT$759.69 billion for the quarter. Its gross margin reached 57.8%, comfortably beating the company's guidance. Investors have cast doubts about the sustainability of the AI frenzy and the returns of the technology industry's massive investments in AI chips and infrastructure, contributing to the 0.9% decline in TSMC's stock in July-September. The company's robust performance, however, showed that demand for advanced AI chips remains elevated as the world's tech giants continue to bet on the fast-growing technology. TSMC said third-quarter revenue from its high-performance computing segment, which includes AI chips, rose about 11% sequentially, while revenue from the smartphones segment increased 16% and revenue from its Internet-of-Things segment jumped 35%. The company's better-than-expected results came after ASML, which supplies semiconductor-making machinery to chip makers including TSMC, warned that while demand for AI remained strong, other market segments are taking longer than expected to recover, raising concerns about an uneven recovery in the chip industry. TSMC saw "extremely robust AI-related demand from our customers," Chairman and Chief Executive C.C. Wei said at the postearnings briefing. The Taiwanese company guided for fourth-quarter revenue of US$26.1 billion to US$26.9 billion, with the gross profit margin expected between 57% and 59%. "Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies," said Wendell Huang, TSMC's chief financial officer. TSMC could continue to post a revenue compound annual growth rate of 15%-20% over the next five years, driven by both AI chip demand from Nvidia and the outsourcing by integrated device manufacturers, such as Intel, Morgan Stanley analysts said in a research note ahead of the results.

TSMC set to report strong profit driven by AI boom

TSMC is set to report a net profit of T$300.1 billion ($9.33 billion) for the quarter ended Sept. 30, according to an LSEG SmartEstimate drawn from 23 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 third-quarter net profit of T$211 billion.Taiwan Semiconductor Manufacturing Co, the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 42% leap in third-quarter profit on Thursday thanks to soaring demand. The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a surge towards AI across a spectrum of industries. TSMC is set to report a net profit of T$300.1 billion ($9.33 billion) for the quarter ended Sept. 30, according to an LSEG SmartEstimate drawn from 23 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate. That estimate compares to the 2023 third-quarter net profit of T$211 billion. TSMC last week reported a jump in Taiwan-dollar denominated third-quarter revenue, easily beating market expectations. It will give fourth-quarter revenue guidance in U.S. dollars. However, on Tuesday, ASML, the world's biggest chipmaking equipment supplier to companies including TSMC, forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the chip market, pushing the Dutch firm's shares to their biggest one-day drop since 1998. On Wednesday, TSMC's shares closed down 2.3% at T$1,045, though not far off their historic high of T$1,080 hit on July 11. TSMC, at its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure, as it races to expand production. The chipmaker is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it has said most manufacturing will remain in Taiwan. On its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, compared with a previous forecast of $28 billion to $32 billion. The second half of the year is traditionally the peak season for Taiwanese tech companies as they race to supply customers ahead of the year-end holiday season in major Western markets. The AI boom has helped drive up the price of shares in Asia's most valuable company, with TSMC's Taipei-listed stock leaping 76% so far this year, compared with a 28% gain for the broader market. TSMC, colloquially referred to in Taiwan as the "sacred mountain protecting the country" for its critical role in Taiwan's export-dependent economy, faces little competition, though both Intel and Samsung are trying to challenge its dominance. ($1 = 32.1740 Taiwan dollars)

U.S. chip stocks rally as TSMC's AI-backed outlook impresses investors

Oct 17 (Reuters) - U.S. chip stocks rose before the bell on Thursday after industry bellwether TSMC's strong sales forecast fanned investor optimism about demand for processors used to power artificial intelligence applications. Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, the world's largest contract chipmaker, raised its expectation for annual revenue growth and said sales from AI chips would account for mid-teen percentage of its full-year revenue. Advertisement · Scroll to continue The forecast from the leading producer of advanced AI chips reinforced investor confidence in the outlook for chipmakers whose market values have skyrocketed over the past two years due to a surge in chip spending by Big Tech. U.S.-listed TSMC shares rose 7%, with the company's market capitalization set to cross $1 trillion if premarket gains hold. TSMC customer and AI chip frontrunner Nvidia (NVDA.O), opens new tab and smaller rival AMD (AMD.O), opens new tab both gained more than 2%. Networking chipmaker Broadcom (AVGO.O), opens new tab, smartphone semiconductor maker Qualcomm (QCOM.O), opens new tab and memory chip provider Micron (MU.O), opens new tab rose between 1.5% and 3%. Advertisement · Scroll to continue Struggling chipmaker Intel's (INTC.O), opens new tab shares were also edging higher. Intel has been expanding its chip fabrication facilities in an attempt to challenge TSMC in advanced contract manufacturing - an undertaking analysts expect will take years. TSMC's outlook also offered some respite to investors after deep forecast cuts from chipmaking equipment giant ASML (ASML.AS), opens new tab sparked fears of a slower-than-expected recovery in demand for semiconductors not used in AI. TSMC's U.S.-listed shares are up more than 80% so far this year, while Nvidia has risen over two folds, as investors pour billions of dollars into semiconductor stocks amid Wall Street's booming picks-and-shovels trade. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel Our Standards: The Thomson Reuters Trust Principles., opens new tab

TSMC shares jump on expectation-topping third quarter results - SiliconANGLE

TSMC shares jump on expectation-topping third quarter results Taiwan Semiconductor Manufacturing Co. Ltd. today posted third quarter earnings and revenue that easily topped analyst expectations. TSMC's shares rose more than 9% on the results. The world's largest contract chipmaker generated a net profit of 325.3 billion New Taiwan dollars, or $10.1 billion, in the three months ended September. That represents a 54% improvement over the same time a year earlier. It's also higher than the NT$300.2 billion that analysts polled by LSEG had projected. TSMC's revenue likewise topped the consensus estimate. Third quarter sales climbed 36% year-over-year, to $23.5 billion, well above the $23.09 billion that the market had anticipated. The company attributed the sales jump partly to an increase in smartphone chip orders. Unsurprisingly, strong demand for artificial intelligence processors also factored into TSMC's top line performance. The company disclosed that the revenue it generates from server-grade AI chips is on track to more than triple this year. Nvidia Corp., TSMC's most important customer in the AI accelerator market, relies on the fab operator to make its flagship Blackwell B200 graphics card. The chip is based on TSMC's four-nanometer 4NP manufacturing process. The technology is one generation behind the company's latest three-nanometer N3 node, which it uses to make the chips in Apple Inc.'s newest iPhones. The first iteration of the N3 process entered production in late 2022. Last year, TSMC rolled out an improved version that does away with EUV double patterning, a practice whereby a lithography machine etches transistors into a wafer in two passes rather than one. Reducing the number of passes necessary to make processors cuts production costs and lowers the risk of manufacturing faults. TSMC cited demand for its three-nanometer technology as another contributor to its expectation-topping sales growth last quarter. The company expects this momentum to continue into the current quarter. TSMC is forecasting revenue of $26.1 billion and $26.9 billion for the last three months of the year, which would represent a 35% increase from 2023 at the midpoint. The company expects to end 2024 with capital expenditures of more than $30 billion. This line item covers large purchases such as chipmaking equipment. TSMC believes that its capital expenditures will be higher next year, which is likely tied to the company's investments in process upgrades and new fab construction. TSMC plans to roll out the successor to its flagship three-nanometer manufacturing process in the second half of 2025. The upcoming N2 node, as it's called, features a new gate-all-around transistor design. It also includes a technology that will allow TSMC customers to place circuits with different performance and power-efficiency levels on the same chip. In parallel with its process development efforts, the company is adding more manufacturing capacity. Earlier this year, TSMC broke ground on a $10.9 billion fab in Germany. It's also building three chip plants in Arizona as part of a project that is expected to cost more than $65 billion. The first of the three fabs is set to become fully operational next year. Last month, rumors emerged that TSMC is already using the facility to make a limited quantity of chips for Apple's iPhone 14 series. The two other fabs the company is building in Arizona are expected to come online later this decade.

Nvidia, chip stocks rally after TSMC's blowout earnings By Investing.com

Investing.com -- Chip stocks rose higher Thursday after a blowout earnings report by Taiwan Semiconductor Manufacturing (NYSE:TSM), the world's largest producer of advanced chips and a key player in the ongoing AI boom. TSMC reported a 54% increase in net profit, as global chipmakers continue to benefit from demand driven by AI applications. The company's net income for the July-September quarter was 325.3 billion Taiwanese dollars ($10.1 billion), exceeding the LSEG estimate of 300.2 billion Taiwanese dollars cited by Reuters. Net revenue for the third quarter reached $23.5 billion, up 36% year-on-year. The company's gross margin improved to 57.8% over July-September, compared to 54.3% during the same period last year. In a statement, TSMC said that in the third quarter, "our business was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies," referencing its semiconductor nodes. During an earnings call, TSMC Chairman and CEO C.C. Wei emphasized that AI demand is "real" and noted that the company has experienced the "deepest and widest growth of anyone in this industry" as a result. "We have talked to our customers all the time, including our hyperscaler customers who are building their own chips. And almost every AI innovator is working with TSMC," he said, according to a call transcript produced by FactSet. TSMC now expects its capital expenditure for this year to increase to slightly more than $30 billion, as mentioned during the earnings call. The firm's capital expenditures rose to $6.4 billion in the third quarter, up from $6.36 billion in the previous three months. "TSMC is a major gauge of how quickly the AI movement and hyper data centers can be built out and how healthy supply dynamics are in the space," Paul Marino, Chief Revenue Officer at Themes ETFs told Investing.com. TSMC's Taipei-listed shares have soared nearly 80% year-to-date, surpassing the broader market's gains of 28.57%. The company's solid Q3 print has helped improve investor sentiment following recent disappointing guidance and results by European chipmaker ASML (AS:ASML). The firm saw its shares tumbling after issuing a lower-than-expected forecast of net sales. "The fact that ASML guided so low put some doubt into investors as to whether or not this AI demand is as big as everyone is predicting. And it puts a spotlight on guidance for every other semiconductor company that reports moving forward," Marino commented. "That said, I do believe there is a significant difference in demand from companies like AMD and Nvidia, and investors will look for robust guidance to justify current valuations when they report later in the quarter."

TSMC's AI-driven boom has 'no end in sight', analysts say

Taiwan Semiconductor Manufacturing Company (TSM) (TSMC), the world's largest chipmaker, saw its profits soar 54% in the third quarter, driven by continued demand for its artificial intelligence-capable chips. The Taiwan-based company reported Thursday $23.5 billion in revenue for the quarter, up 36% from a year ago and topping Wall Street's expectations. Net income came in at $10.1 billion, also blowing past estimates compiled by FactSet (FDS). "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies," said Wendell Huang, chief financial officer of TSMC. "Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies." TSMC's U.S.-listed shares jumped 10% in pre-market trading Thursday following the earnings report. Huang had previously said that the company expected smartphone- and AI-related demand to drive business in the third quarter. Looking ahead, TSMC chief C.C. Wei has said he expects chip production to catch up to demand by 2025 or 2026. Wedbush analysts say the company could keep riding this high for a long while. In a note Thursday titled "No End in Sight to AI Derived Strength," analysts, led by Matt Bryson, said the third-quarter results give more confidence to views that TSMC will be able to continue growing gross margins. TSMC's gross margins were 58% for the quarter. The analysts expect AI chip revenues to more than triple in 2024 and account for around a mid-teens percentage of TSMC's revenues. For the fourth quarter, TSMC estimates that its revenue will come in between $26.1 billion and $26.9 billion -- a multi-billion dollar increase from last quarter. It's projecting gross profit margin of 57.0% to 59.0%, consistent with the third quarter or slightly higher.

TSMC Hikes Revenue Outlook in Show of Confidence in AI Boom

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. raised its target for 2024 revenue growth after quarterly results beat estimates, allaying concerns about global chip demand and the sustainability of an AI hardware boom. The main chipmaker to Nvidia Corp. and Apple Inc. now expects sales to climb roughly 30% in US dollar terms this year, up from previous projections for about a mid-20% rise. That's after TSMC reported better-than-predicted earnings for the September quarter. And it foresees capital expenditure rising in 2025 from roughly $30 billion this year. TSMC's outlook should help tamp down concerns that investors misjudged AI and semiconductor demand. Those fears crystallized after chip industry linchpin ASML Holding NV stunned markets by reporting about half the orders investors had expected. On Thursday, TSMC Chief Executive Officer C. C. Wei sought to dispel those doubts. "The demand is real and I believe it's just the beginning," Wei said, echoing a number of executives including Nvidia's CEO. In terms of overall chip demand, "everything's stabilized and start to improve." TSMC's American depositary receipts rose more than 6% in pre-market trading in New York. Nvidia's stock gained about 2.5%. Shares of Japanese chip gear makers including Lasertec Corp. pared losses in Tokyo, while Infineon Technologies AG rose in Europe alongside sector peers. TSMC's shares have surged more than 70% this year, outpacing many of Asia's biggest tech firms in a reflection of strong sales of the Nvidia chips vital to artificial intelligence development. For a liveblog on TSMC's earnings, click here. Taiwan's largest company had raised its outlook for 2024 revenue just a few months ago in July, underscoring expectations for spending on AI infrastructure from the likes of Microsoft Corp. and Amazon.com Inc. Steady adoption of artificial intelligence should also help fuel sales of iPhones and other gadgets in the long run. Still, investors had watched for deviations in TSMC's outlook after ASML blamed slower-than-expected recovery in the automotive, mobile and PC markets for stalling chip plant expansion plans. AI remains a bright spot, its executives said. "TSMC is not just an AI machine," said Ben Barringer, technology analyst at Quilter Cheviot. "They are much better positioned than both Intel and Samsung, which have had their own well-documented issues. TSMC has positioned itself well and should any real downturn hit the sector, it should be in a strong position to weather this and emerge in a good place." What Bloomberg Intelligence Says TSMC's 57%-plus gross-margin guidance for 4Q (vs. consensus' 54.7%) -- coupled with the fast ramp-up of N3-node revenue -- indicates still-strong demand for its AI chips from Nvidia and others, consistent with our view. Sales growth of about 25% in 2025 looks feasible, based on our calculations, supported by TSMC's leadership in 3- and 5-nm nodes, and its advanced CoWoS proprietary semiconductor packaging technology. On Thursday, TSMC reported a better-than-projected 54% rise in September-quarter net profit to NT$325.3 billion ($10.1 billion). And it expects revenue of $26.1 billion to $26.9 billion in the final quarter, beating an estimate for $24.9 billion. The world's largest maker of advanced chips has been one of the biggest beneficiaries of a global race to develop artificial intelligence. Its shares have more than doubled since that boom took off in late 2022 with the debut of OpenAI's ChatGPT. TSMC's market capitalization briefly crossed the $1 trillion mark in the US. Yet even before ASML, some investors have grown cautious about the trajectory of global AI spending. They question whether big tech firms like Meta Platforms Inc. and Alphabet Inc. will continue to splash out on chips and data centers without a truly killer application. The risks of data center over-capacity and geopolitical issues have unnerved some investors. Bloomberg reported this week that Biden administration officials have discussed capping sales of advanced AI chips from Nvidia and other American companies on a country-specific basis. On Thursday, Wei said he expects revenue from AI server processors to more than triple this year, yielding a mid-teens percentage of total sales in 2024. Longer-term, TSMC is pursuing a rapid international expansion. It's planning more plants in Europe with a focus on the market for artificial intelligence chips, according to a senior Taiwanese official. That's on top of construction underway in Japan, Arizona and Germany. --With assistance from Vlad Savov, Cindy Wang, Mayumi Negishi, Lianting Tu and Henry Ren. (Updates with Nvidia shares and analyst's comment from the fifth paragraph.)

Nvidia Supplier TSMC Reports Q3 Revenue, Earnings Beat Amid Rising Demand For AI Chips - Taiwan Semiconductor (NYSE:TSM)

TSMC reported consolidated third-quarter revenue of NT$759.69 billion ($23.50 billion), up 39% year-over-year. Taiwan Semiconductor Manufacturing Company Ltd. TSMC announced quarterly results that came in ahead of forecasts, thanks to strong demand for advanced processor node technologies used in artificial intelligence applications. The foundry supplies chips to most global corporations including Nvidia Corp. NVDA and Apple, Inc. AAPL. TSMC's Key Q3 Metrics: Hsinchu, Taiwan-based TSMC reported consolidated third-quarter revenue of NT$759.69 billion ($23.50 billion), up 39% year-over-year. Sequentially, the top line expanded by 12.8%. In dollar terms, the revenue growth was 36% year-over-year and 12.9% quarter-over-quarter. Revenue topped the NT$748 billion consensus, as provided by Bloomberg. The top-line performance also exceeded the company's guidance of $22.4 billion- $23.2 billion. Net income and earnings per share climbed a steeper 54.2% each to NT$325.26 billion and NT$12.54 per share, respectively. Analysts, on average, expected a net profit of NT $300.2 billion, according to LSEG estimate available through Reuters. The company said 3-nm accounted for 20% of the total revenue, while 5-nm and 7-nm technologies accounted for 32% and 17%, respectively. The more advanced technologies together made up 69% of the total wafer revenue, up from 67% in the previous quarter. See Also: Best Semiconductor Stocks Margin Profile: Here's how margins compare to the prior-year periods: TSMC Stock: The AI euphoria has driven shares of companies levered to the technology sharply higher and TSMC is no exception. The Taiwanese company's ADRs listed on the NYSE are up over 82% for the year-to-date period. It ended Wednesday's session up 0.19% at $187.48, according to Benzinga Pro data. Photo by Sundry Photography on Shutterstock Read Next: After ASML Rocks AI Hardware Names, Gene Munster Explains Why It's 'Overreaction:' 'AI Trade Is On Track' Market News and Data brought to you by Benzinga APIs

Taiwan's TSMC posts sharp rise in third quarter net profit

Taipei (AFP) - Taiwanese chip giant TSMC announced a bigger-than-expected increase in net profit for the third quarter on Thursday and raised its growth forecasts for the year on "extremely robust" demand for AI technology. Taiwan Semiconductor Manufacturing Company controls more than half the world's output of chips used in everything from Apple's iPhones to Nvidia's cutting-edge artificial intelligence hardware. Tech stocks took a hit this week as Dutch powerhouse ASML, which supplies chip-making machines to the semiconductor industry, unveiled a cut to its 2025 guidance and a disappointing slump in sales bookings. Fuelling the falls were reports that US President Joe Biden's administration was considering a cap on exports of advanced AI chips to some countries. TSMC -- which is listed in Taipei and New York -- said net profit in the three months to September hit NT$325.26 billion (US$10.1 billion), up 54.2 percent from the same period last year. Revenues in the period grew 36 percent on-year to US$23.5 billion, the firm said in a statement. "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading three nanometre and five nanometre technologies," TSMC chairman CC Wei told an analyst briefing. "Moving into fourth quarter, we expect our business to continue to be supported by strong demand for our leading-edge process technologies." TSMC said it expected full-year revenue to increase by nearly 30 percent. Taiwan's largest company raised its outlook for 2024 revenue in July, underscoring expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon. AI revolution TSMC is at the forefront of a generative AI revolution, churning out the world's most advanced microchips needed to power products made by Silicon Valley. But it is grappling with geopolitical tensions between the United States and China over technology import restrictions, trade and Taiwan. Its headquarters -- and the bulk of its fabrication plants -- are in Taiwan, a self-ruled island that China claims as part of its territory. China held a day of large-scale war games around Taiwan on Monday that included a blockade exercise that experts have warned would be devastating for the island's economy. The United States and some European countries have blocked exports of high-tech chip technology to China over fears of military use. The semiconductor supply chain is highly vulnerable to shocks, and concerned governments have lobbied TSMC to move more production away from Taiwan. TSMC's new factories overseas include three planned in the United States, while one opened in Japan this year. In August, the company broke ground on its first European factory in the eastern German city of Dresden and reportedly is planning more plants in Europe with a focus on AI chips.

Why Artificial Intelligence (AI) Chipmaker Taiwan Semiconductor Manufacturing Charged Higher on Thursday | The Motley Fool

Shares of Taiwan Semiconductor Manufacturing Company (TSM 10.78%), also known as TSMC, charged as much as 13.4% higher on Thursday. As of 2:13 p.m. ET, the stock was still up 11.4%. Driving the semiconductor specialist higher were its quarterly financial results, which came in ahead of expectations. After the blistering share price rally that kicked off early last year, many stocks in the artificial intelligence (AI) space have been taking a breather as investors take a step back to survey the landscape. Many are looking for clues about the state of the ongoing adoption of AI, and TSMC's results offer some clear indicators. In the third quarter, TSMC generated revenue of 759.7 billion New Taiwan dollars (roughly $23.5 billion), up 39% year over year (or 36% in U.S. dollars). This resulted in a 54% rise in earnings per share (EPS) to NT$12.54 (or $1.94 per ADR). Analysts' consensus estimates had called for revenue of $23.1 billion and EPS of $1.80, so TSMC sailed past expectations with room to spare. CFO Wendell Huang said the results were driven by "strong smartphone and AI-related demand," and a quick look at those segments shows why. Revenues from the company's high-performance computing segment, which includes chips used in AI, surged 51% year over year. The ongoing rebound in smartphone sales was also evident, as revenue from that segment jumped 34%. TSMC produces about 90% of the world's most advanced, high-end semiconductors, including most of the ones used to power AI applications. Many investors were looking to the semiconductor giant for evidence that demand for AI is still robust -- and the results suggest the answer is a resounding "yes." Given that, concerns regarding a possible slowdown in AI adoption appear groundless. According to a forecast by Bloomberg Intelligence, the generative AI market is expected to grow at a compound annual rate of 42% over the next eight years to a value of $1.3 trillion by 2032. As the chips TSMC churns out are key hardware for AI, it should continue to thrive. Furthermore, it's trading at 32 times forward earnings, which is a fair price to pay for a company playing such a pivotal role in the AI revolution. As such, TSMC stock is a buy.

TSMC posts sharp rise in Q3 net profit

AFP - Chip giant TSMC announced yesterday a bigger-than-expected increase in net profit for the third quarter of 2024, buoyed by strong demand for smartphones and artificial intelligence (AI) technology. TSMC controls more than half the world's output of chips used in everything from Apple's iPhones to Nvidia's cutting-edge AI hardware. Tech stocks took a hit this week as Dutch tech giant ASML, which supplies chip-making machines to the semiconductor industry, unveiled a cut to its 2025 guidance and a disappointing slump in sales bookings. Fuelling the falls were reports that United States President Joe Biden's administration was considering a cap on exports of advanced AI chips to some countries. TSMC said net profit in the three months to September hit USD10.1 billion, up 54.2 per cent from the same period last year. Revenues in the period grew 36 per cent on-year to USD23.5 billion, the firm said in a statement. "In the third quarter, revenue increased 12.8 per cent quarter over-quarter, as our business was supported by strong smartphone and AI-related demand for our industry leading 3nm and 5nm technologies," the company said in a statement.

TSMC Posts Record Quarterly Profit Amid AI Boom

Taiwan Semiconductor Manufacturing Co. maintained its growth momentum in the third quarter, with net profit jumping 54% to a record despite concerns about the sustainability of the artificial-intelligence boom. The world's largest contract chip maker said Thursday that quarterly net profit was 325.26 billion New Taiwan dollars, equivalent to US$10.10 billion, compared with NT$211.00 billion a year earlier. That exceeded the NT$298.00 billion consensus estimate from a FactSet poll of analysts. Revenue rose 39% to NT$759.69 billion for the quarter after climbing 40% in September. TSMC's gross margin reached 57.8%, comfortably beating the company's high-end guidance of 55.5%. Investors have cast doubts about the sustainability of the AI frenzy and the returns of the technology industry's massive investments in AI chips and infrastructure, which contributed to the 0.9% decline in TSMC's stock in the July-September period. However, the foundry's continued robust performance showed that demand for advanced AI chips remains elevated as the world's tech giants bet on the fast-growing technology.

U.S. chip stocks rally as TSMC's AI-backed outlook impresses investors

(Reuters) - U.S. chip stocks rose before the bell on Thursday after industry bellwether TSMC's strong sales forecast fanned investor optimism about demand for processors used to power artificial intelligence applications. Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, raised its expectation for annual revenue growth and said sales from AI chips would account for mid-teen percentage of its full-year revenue. The forecast from the leading producer of advanced AI chips reinforced investor confidence in the outlook for chipmakers whose market values have skyrocketed over the past two years due to a surge in chip spending by Big Tech. U.S.-listed TSMC shares rose 7%, with the company's market capitalization set to cross $1 trillion if premarket gains hold. TSMC customer and AI chip frontrunner Nvidia and smaller rival AMD both gained more than 2%. Networking chipmaker Broadcom, smartphone semiconductor maker Qualcomm and memory chip provider Micron rose between 1.5% and 3%. Struggling chipmaker Intel's shares were also edging higher. Intel has been expanding its chip fabrication facilities in an attempt to challenge TSMC in advanced contract manufacturing - an undertaking analysts expect will take years. TSMC's outlook also offered some respite to investors after deep forecast cuts from chipmaking equipment giant ASML sparked fears of a slower-than-expected recovery in demand for semiconductors not used in AI. TSMC's U.S.-listed shares are up more than 80% so far this year, while Nvidia has risen over two folds, as investors pour billions of dollars into semiconductor stocks amid Wall Street's booming picks-and-shovels trade. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel)

TSMC Q3 profit blows past expectations on strong AI demand By Investing.com

Investing.com-- TSMC (NYSE:TSM)- the world's biggest contract chipmaker- posted a stronger-than-expected third quarter profit on Thursday, as sustained demand from the artificial intelligence industry continued to boost its topline. The firm clocked a net profit of T$325.26 billion ($$10.1 billion) in the three months to September 30, TSMC said in a press release. The figure was higher than a Reuters estimate of T$300.1 billion. The firm's third-quarter revenue came up to T$759.69 billion, up 39% from last year. Earnings were boosted chiefly by increased demand for TSMC's advanced 3-nanometer chips, which accounted for 20% of overall revenue from wafer sales. The firm is a key component of the global chipmaking supply chain, and has benefited greatly from increased demand on the back of the AI boom. The firm ranks Apple Inc (NASDAQ:AAPL) and NVIDIA Corporation (NASDAQ:NVDA) among its biggest clients, with the latter being a key source of demand for TSMC in the past year. Nvidia makes the most advanced AI chips in the market.

Taiwan's TSMC posts sharp rise in 3rd quarter net profit

This undated picture shows a Taiwan Semiconductor Manufacturing Company (TSMC) logo in Taiwan. AFP-Yonhap Taiwanese chip giant TSMC announced a bigger-than-expected increase in net profit for the third quarter on Thursday and raised its growth forecasts for the year on "extremely robust" demand for AI technology. Taiwan Semiconductor Manufacturing Company controls more than half the world's output of chips used in everything from Apple's iPhones to Nvidia's cutting-edge artificial intelligence hardware. Tech stocks took a hit this week as Dutch powerhouse ASML, which supplies chip-making machines to the semiconductor industry, unveiled a cut to its 2025 guidance and a disappointing slump in sales bookings. Fuelling the falls were reports that US President Joe Biden's administration was considering a cap on exports of advanced AI chips to some countries. TSMC -- which is listed in Taipei and New York -- said net profit in the three months to September hit NT$325.26 billion ($10.1 billion), up 54.2 percent from the same period last year. Revenues in the period grew 36 percent on-year to $23.5 billion, the firm said in a statement. "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading three nanometer and five nanometer technologies," TSMC chairman CC Wei told an analyst briefing. "Moving into fourth quarter, we expect our business to continue to be supported by strong demand for our leading-edge process technologies." TSMC said it expected full-year revenue to increase by nearly 30 percent. Taiwan's largest company raised its outlook for 2024 revenue in July, underscoring expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon. AI revolution TSMC is at the forefront of a generative AI revolution, churning out the world's most advanced microchips needed to power products made by Silicon Valley. But it is grappling with geopolitical tensions between the United States and China over technology import restrictions, trade and Taiwan. Its headquarters -- and the bulk of its fabrication plants -- are in Taiwan, a self-ruled island that China claims as part of its territory. China held a day of large-scale war games around Taiwan on Monday that included a blockade exercise that experts have warned would be devastating for the island's economy. The United States and some European countries have blocked exports of high-tech chip technology to China over fears of military use. The semiconductor supply chain is highly vulnerable to shocks, and concerned governments have lobbied TSMC to move more production away from Taiwan. TSMC's new factories overseas include three planned in the United States, while one opened in Japan this year. In August, the company broke ground on its first European factory in the eastern German city of Dresden and reportedly is planning more plants in Europe with a focus on AI chips. (AFP)

Apple's 3nm Push Boosts Taiwan Semi's Q3, AI Revenue Set To Triple: Analyst - Taiwan Semiconductor (NYSE:TSM)

TSMC's 3nm technology outperforms, boosting revenue and gross margins, driven by Apple and AI growth. Taiwan Semiconductor Manufacturing Co TSM stock surged after upbeat quarterly print on Thursday. The key Nvidia Corp NVDA supplier reported third-quarter revenue of 759.69 billion New Taiwan dollar ($23.50 billion), up 39%, topping $22.4 billion-$23.2 billion guidance and the consensus estimate. The contract chipmaker attributed the quarterly performance to robust smartphone and AI-related demand for its 3nm and 5nm technologies. Also Read: Nokia Q3: Earnings Miss, CEO Cites Telecom Weakness And Anticipates India Demand Rebound Its gross margin is 57.8%, up from 54.3% a year ago. The operating margin grew to 47.5% from 41.7% a year ago. It expects fourth-quarter revenue of $26.1 billion-$26.9 billion, above the Street consensus of $24.86 billion. Needham analyst Charles Shi reiterated Taiwan Semiconductor with a Buy and a $210 price target. Needham: By node, relative to Shi's estimates, Taiwan Semiconductor's third-quarter print shows a much more robust performance of 3nm and a slightly weaker performance of 5nm. The analyst noted the 3nm upside should be primarily due to Apple Inc AAPL. In contrast, 5nm revenue is leveling off after six consecutive quarters of strong sequential growth. The gross margin performance, which is now back in the high 50s range, is a positive sign as Taiwan Semiconductor overcomes several cost challenges anticipated by management earlier this year, including 3nm dilution, 5nm to 3nm conversion cost, and electricity cost increases, he said. Interestingly, the company had flagged 5nm and 3nm wafer prebuild as part of the reason for the gross margin upside, Shi added. The analyst noted that Taiwan Semiconductor raised its full-year revenue growth target from "slightly above the mid-20s" to "close to 30%" while maintaining the 10% ex-memory semiconductor growth outlook. Taiwan Semiconductor expects to triple AI revenue this year, which will account for mid-teens percent of its total revenue. Based on management commentary, Shi estimates Taiwan Semiconductor's AI revenue was around $4 billion in 2023 and will likely reach $13 billion in 2024. Taiwan Semiconductor has guided AI to account for 20% of the total revenue by 2028, translating to ~$33 billion+ if the 15%+ total revenue CAGR continues through the next four years. Taiwan Semiconductor's reported revenue split between technology nodes suggests that the non-wafer revenue, the majority of which comes from packaging, saw a meaningful step up from $2.4 billion in the second quarter to $3.2 billion in the third quarter, a 36% increase sequentially. This could be partially driven by Apple's ramp that drives InFO revenue. Still, the magnitude of the sequential growth is above seasonality (~20% sequentially) and supports the rumor that Taiwan Semiconductor may have released 60%-80% more CoWoS capacity in the third quarter. Taiwan Semiconductor expects 2024's CapEx to be slightly above $30 billion, a $1 billion trim to 2024's CapEx budget. Last quarter, it tightened the CapEx guidance range from $28 billion-$32 billion to $30 billion-$32 billion and effectively raised CapEx by about $1 billion. On the bright side, with Taiwan Semiconductor reporting the quarterly CapEx for the first three quarters of the year to be only $6 billion per quarter, it needs to spend ~$12 billion CapEx in the fourth quarter. The magnitude of the step-up is likely driven by the initial 2nm buildout. Price Action: TSM stock is up 11.7% at $209.41 at last check Thursday. Also Read: Citigroup Remains A Compelling Investment Opportunity: Analysts Take On Q3 Performance Photo by wakamatsu.h via Shutterstock Market News and Data brought to you by Benzinga APIs

Chip Stocks Rally as TSMC Earnings Point To Strong AI Demand

Pockets of the industry are still grappling with an inventory glut that has persisted for more than a year amid sluggish consumer demand. Chip stocks rose Thursday after the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSM), reinvigorated Wall Street's AI enthusiasm with better-than-expected quarterly results and a rosy financial outlook. The PHLX Semiconductor Index (SOX) advanced about 2% on Thursday morning, led by TSMC, up 12%. Shares of Broadcom (AVGO) climbed more than 3%, while Nvidia (NVDA), the chip designer at the heart of the AI craze, rose 2%, as did chip designer Arm Holdings (ARM). TSMC on Thursday morning said net income increased by more than 50% in the third quarter, far exceeding Wall Street's estimates. CFO Wendell Huang attributed the company's results to "strong smartphone and AI-related demand." CEO C.C. Wei estimated that the contribution of AI processor sales to TSMC's total revenue would triple this year. The results underscored the diverging fortunes of companies within the broader semiconductor industry. Pockets of the industry are still grappling with an inventory glut that has persisted for more than a year amid sluggish consumer demand. "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover," said Christophe Fouquet, CEO of Dutch chipmaking equipment manufacturer ASML Holding (ASML) earlier this week.

TSMC's Profit Beats Estimates During an AI Chip Boom

Taiwan Semiconductor Manufacturing Co. posted a better-than-projected 54% rise in quarterly earnings after strong sales of Nvidia Corp. AI chips offset a sagging mobile industry. The main chipmaker to Nvidia Corp. and Apple Inc. reported September-quarter net profit of NT$325.3 billion ($10.1 billion), versus an average estimate for NT$299.3 billion. That followed a previously reported 39% climb in revenue during the period.

TSMC Q3: Strong Growth In Server AI Processor Market (NYSE:TSM)

Potential risks include US export restrictions on AI chips to China and geopolitical pressures to shift production to Intel's foundry capabilities. I assigned a "Buy" rating to Taiwan Semiconductor Manufacturing Company Limited aka TSMC (NYSE:TSM) in September 2024, emphasizing their 2nm and A16 roadmap. During the Q3 FY24 earnings call, the management indicated very strong More than 15 years of professional investment experience in global equities across all sectors. My investment style is fundamental, bottom-up, long-term, and quality growth-oriented. I am seeking companies specializing in niche markets, with strong growth potential, a solid management team, a sound capital allocation policy, and, most importantly, reasonable valuation. I do not chase quarterly results, nor do I follow the herd mentality. I do not use short-term stock performance as the measure of a company's quality. I am targeting to achieve a 15% annual return in my portfolio. I typically construct my portfolio with 15-20 stocks, focusing on diversification of holdings, risk management, macro-driven sector weights, and disciplined trading and valuations as key factors.Disclosure: Lighting Rock and I are working in the same investment team. I am writing here independently. Analyst's Disclosure: I/we have a beneficial long position in the shares of TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Nvidia nears a new record as AI demand drives a big TSMC earnings beat

The next president will face a debt problem that could lead to a crisis, strategist says The chipmaker's stock was up around 2.8% during mid-day trading on Thursday, at about $139.51 per share. Earlier in the day, the stock briefly climbed over 3% to set a new intraday record of $140.89 per share, according to CNBC. The stock's last record intraday high was on June 20, when it reached $140.76 per share. Taiwan Semiconductor Manufacturing Company's (TSM+11.67%) shares were up around 12% during mid-day trading on Thursday after it beat earnings expectations for the third quarter. The Taiwanese chipmaker reported revenue of NT$759.69 billion, or $23.5 billion, for the quarter ended September 30. Third-quarter revenue was up 36% year over year in U.S. dollars, TSMC said, and was up 12.9% from the previous quarter. In New Taiwan dollars, net income and diluted earnings per share (EPS) both rose 54.2%. TSMC was expected to report September-quarter revenue of $23.3 billion, according to analyst estimates compiled by FactSet (FDS-0.23%). "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies," Wendell Huang, TSMC chief financial officer, said in a statement. "Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies." TSMC, which counts Nvidia and Apple (AAPL+0.25%) as its main customers, has seen its shares rise over 107% so far this year. Meanwhile, shares of Nvidia fell over 4% earlier this week after closing at a record high. The drop occurred following a report that the U.S. could cap sales of advanced artificial intelligence chips from U.S.-based chipmakers to certain countries. Biden administration officials in recent weeks have discussed putting a ceiling on export licenses for advanced AI chips, including those from Nvidia and rival AMD (AMD+1.22%), to countries in the Middle East, citing national security concerns, Bloomberg reported.

TSMC revenue up 36% on demand for AI, smartphone chips

Biggest semi contract manufacturer - and Nvidia supplier - building out capacity in US and Europe Taiwan's semiconductor giant TSMC has reported a good third quarter with revenue up 36 percent over a year ago, due to strong demand from chip companies for smartphone and AI-related silicon. The world's largest semiconductor contract manufacturer said its income for the third quarter ended September 30, 2024 stood at $23.50 billion in US dollars, a 36 percent jump in US dollar figures on the same period last year and 12 percent up on the previous quarter. Shares in TSMC were 6 percent up in early premarket trade, and are now 80 percent higher in value than at the start of the year. Senior VP and Chief Financial Officer Wendell Huang was unequivocal about what has been driving this leap in revenue: "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3 nm and 5 nm technologies." This is a situation Huang expects to continue through the fourth quarter, he added. Broken down by process technology, those advanced 3 nm and 5 nm process nodes now account for more than half the company's revenue, as chipmakers such as Nvidia demand them for their latest products. 5 nm makes up 32 percent of this, with 3 nm accounting for 20 percent of revenue, even though TSMC is still ramping up volume production. When looked at in terms of platform, high performance computing (HPC) comprised 51 percent of the silicon supremo's revenue, with smartphone-related manufacturing accounting for 34 percent. IoT chips made up only 7 percent of income, but are the fastest growing segment - up 35 percent quarter on quarter, while DCE (digital consumer electronics) fell by 19 percent. Also during this quarter, TSMC broke ground on its first European fabrication facility, which is being constructed in Dresden, Germany and signed a deal with US semiconductor assembly and test firm Amkor Technology for an advanced packaging facility to be built in Peoria, Arizona. Looking ahead to the end of the current fourth quarter, TSMC forecasts revenue to be up again to between $26.1 billion and $26.9 billion, no doubt on the back of the continuing demand for GPUs to drive model training - so long as the AI wave lasts, that is. ®

Taiwan Semiconductor stock undervalued, Nomura sees AI growth driving further upside By Investing.com

On Friday, Nomura/Instinet maintained a Buy rating on Taiwan Semiconductor Manufacturing Co. Ltd. (2330:TT) (NYSE: TSM) stock, while increasing the price target to NT$1,400.00 from NT$1,355.00. The revised target comes after TSMC's recent analyst meeting where the company discussed its financial performance and outlook, particularly emphasizing the role of artificial intelligence (AI) in driving demand. The semiconductor giant reported a robust gross margin (GM) for the third quarter of 2024, reaching 57.8%, and provided guidance for the fourth quarter GM to be between 57.0% and 59.0%. These figures exceeded market expectations and reinforced the belief that a GM above 55% could become the new standard for TSMC. This is attributed to favorable pricing dynamics and efficiency improvements from the capacity conversion of its advanced N5/3 technologies. TSMC's forecast for fourth-quarter 2024 revenue growth is set at 13% quarter-over-quarter, surpassing both the analyst's prior estimate of 10% and the buy-side consensus of 5-10%. In light of this, Nomura/Instinet has increased its earnings per share (EPS) forecast for TSMC for the years 2024 to 2026 by 2-3%. The price target adjustment is based on a 24x multiple of the forecasted 2025 EPS, which remains unchanged. The analyst underscored that TSMC's stock presents an attractive value at 18x/19x NMR/BBG 2025F EPS, noting it is trading at roughly a 20% discount compared to the SOX P/E ratio. The optimism is further bolstered by TSMC's guidance, which suggests that the impact of new overseas fabs on GM will be managed effectively, with only a 2-3 percentage point dilution expected in 2025. In other recent news, Taiwan Semiconductor Manufacturing Company (TSMC) has been the subject of positive analyst attention following strong third-quarter results. Both BofA Securities and UBS have raised their price targets for TSMC, with BofA setting it at NT$1,400 and UBS at NT$1,300, while maintaining their respective buy ratings. The upward revisions come after TSMC reported a third-quarter earnings per share of NT$12.54, surpassing market expectations by 8%. TSMC's third-quarter gross margin also made headlines, reaching 57.8%, higher than the company's guided range of 53.5-55.5%. This increase was attributed to higher utilization rates and cost improvements, particularly due to advancements in the 5/3 nanometer technologies. Additionally, TSMC has projected a gross margin expansion to 57.0-59.0% in the fourth quarter of 2024, exceeding previous expectations. Both BofA Securities and UBS are optimistic about TSMC's future, citing the company's leadership in the semiconductor industry and potential for continued growth. UBS projects TSMC's gross margin to further increase to 58.5% in 2025, considering factors such as a price increase on N5/3 technologies, improved utilization, and a decrease in N3 dilution. Moreover, TSMC reported a 12.8% sequential revenue increase to NT$23.5 billion in the third quarter of 2024, driven by strong demand for 3-nanometer and 5-nanometer technologies in smartphones and AI applications. The company also anticipates Q4 2024 revenue to be between $26.1 billion and $26.9 billion. These recent developments underline TSMC's robust financial performance and promising growth trajectory. Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) continues to demonstrate strong financial performance, aligning with Nomura/Instinet's optimistic outlook. According to InvestingPro data, TSM's revenue growth remains robust, with a 22.65% increase over the last twelve months as of Q3 2024. This growth is even more pronounced on a quarterly basis, with Q3 2024 showing an impressive 38.95% revenue growth. The company's profitability metrics are equally compelling. TSM boasts a gross profit margin of 54.45% and an operating income margin of 42.04% for the last twelve months, reflecting its operational efficiency and pricing power in the semiconductor market. These figures support the analyst's view on TSMC's ability to maintain high gross margins. InvestingPro Tips highlight TSM's strong dividend performance, with a 42.34% dividend growth over the last twelve months. This, coupled with a current dividend yield of 0.95%, underscores the company's commitment to shareholder returns amid its growth trajectory. For investors seeking a deeper understanding of TSM's potential, InvestingPro offers 16 additional tips, providing a comprehensive analysis of the company's financial health and market position.

TSMC Lifts Profits 54% on AI Demand

Taiwan Semiconductor Manufacturing Corp lifted third quarter revenues 39% to $23.5 billion and net income 54%, as the world's biggest chipmaker benefited from surging demand for AI chips. TSMC manufactures chips designed by other companies, such as Apple and Nvidia. It particularly dominates the market for advanced chips and has emerged as the only manufacturer able to make Nvidia's

Why Nvidia, AMD, Micron, Arm And Other Chipmakers Are Ripping Higher Premarket On Thursday - Apple (NASDAQ:AAPL), Advanced Micro Devices (NASDAQ:AMD)

Taiwan Semiconductor Manufacturing Company Ltd. TSMC is seen singularly lifting the semiconductor space in premarket trading on Thursday. The Catalyst: Hsinchu, Taiwan-based TSMC reported third-quarter revenues and earnings per share that exceeded consensus estimates, citing strong smartphone and AI-related demand for its more advanced 3nm and 5nm technologies. The relatively higher share of more advanced processor node technologies gave margins a big boost, with gross, operating, and net margins all exceeding prior-year periods. The foundry supplies chips to most global corporations including Nvidia Corp. NVDA and Apple Inc. AAPL. The company's earnings and earnings per share both jumped 54% year-over-year, growing faster than the top line, which climbed 39%. More importantly, TSMC guided fourth-quarter revenue to $26.1 billion to $26.9 billion, well above the $24.86 billion consensus estimate. TSMC's stellar quarterly results should quell the anxiety of investors, who were increasingly becoming skittish about a potential AI bubble burst. See Also: Best Semiconductor Stocks Stock Moves: Nvidia, whose advanced chips, power most of AI applications and processes, jumped 2.56% to $139.19, according to Benzinga Pro data. The Jensen Huang-led company is on the cusp of topping Apple as the world's most-valued company, with merely a differential of $195 billion in market cap between the companies. A $8 gain by Nvidia could help accomplish the feat, provided Apple remains flat or retreats. Among the other movers are: Advanced Micro Devices Inc. AMD rose 2.93% to $160.70. Micron Technology Inc. MU added 2.17% to $111.61. Arm Holdings Plc. ARM jumped 3.90% to $158.45. Broadcom Inc. AVGO moved up 2.23% to $180.76. Qualcomm Inc. QCOM rose 1.62% to $174.25. Marvell Technology Inc. MRVL gained 2.23% to $83.50. iShares Semiconductor ETF SOXX climbed 2.33% to $232.65. Read Next: After ASML Rocks AI Hardware Names, Gene Munster Explains Why It's 'Overreaction:' 'AI Trade Is On Track' Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs

Nvidia supplier leads chip rally despite geopolitical fears

While Nvidia is virtually the only game in town for the graphic processing units, or GPUs, which Big Tech other AI companies need to train their models, it doesn't make the chips it designs and sells. That task falls to TSMC, which controls roughly 90% of the market for advanced chip manufacturing, also known as the foundry business. Thus, much like with Nvidia, TSMC's earnings serve as a bellwether for the industry, with its performance having a major impact on both suppliers and clients. And based on TSMC's third quarter, the AI boom has plenty of room to run. The company said demand for the company's three- and five-nanometer chips, which no competitor can currently match, helped drive Q3 revenue to $23.5 billion, up 36% from last year. It expects sales to be even hotter to close the year, with the company issuing revenue guidance between $26.1 and $26.9 billion for the fourth quarter. It's not been all good news for the industry this week, however. Shares of Nvidia and other chipmakers dipped Tuesday after Bloomberg reported the Biden administration is considering increased restrictions on AI chip exports. The talks focused on deep-pocketed countries in the Persian Gulf, such as Saudi Arabia and the United Arab Emirates. These nations will presumably be massive customers for chipmakers as countries race to develop their own artificial intelligence infrastructure, often referred to as sovereign AI. The Biden administration has already restricted the flow of AI chips from Nvidia, AMD, and other chipmakers to more than 40 countries across the Middle East, Africa, and Asia to prevent them from being diverted to China, which the U.S. is battling for semiconductor supremacy. Similar restrictions have heavily impacted ASML, which supplies semiconductor equipment to the likes of TSMC. The Dutch company's shares plunged 16% on Tuesday after it reported falling sales amid new U.S. and Dutch export restrictions on shipments to China, a market that accounted for almost half of its business in Q2. Angelo Zino, a senior tech equity analyst at CFRA Research, noted the U.S. presidential election in November is bound to shake up the geopolitical landscape and affect export controls. Comments made in July by former President and Republican nominee Donald Trump, for example, sparked fresh doubt about America's commitment to defend Taiwan from Chinese aggression. "We think investors need to get comfortable with greater geopolitical pressures impacting chipmaker businesses," he wrote in a recent note. Outsize returns might help TSMC shareholders breathe a little easier for now.

Nvidia stock tests record high as key AI player smashes Q3 earnings

Nvidia shares powered higher in early Thursday trading, putting the stock within touching distance of its all-time high, following a blowout set of third quarter earnings from the chipmaker at the epicenter of its supply chain. Nvidia (NVDA) , which sits just below Apple (AAPL) as the world's second-most valuable company by market cap, has been riding a massive AI demand wave for much of the past 18 months as the world's biggest tech companies scramble to invest billions in the hot new technology. That's put tremendous pressure on the broader semiconductor supply chain, as well as the production capacity of Taiwan Semiconductor Manufacturing Co (TSMWF) , the world's largest contact chip maker, as demand continues to accelerate and the market remains dominated by only a handful of chip makers and designers. Group CEO C.C. Wei told investors that the AI demand story is "real and just the beginning", adding that overall activity outside of the AI investment race is "stabilized and start to improve." 'The demand is real' TSMC posted record quarter profits of T$325.3 million and forecast a full-year revenue growth rate of around 30%, while pegging its overall capital spending plans at just over $30 billion for this year and higher still in 2025. "Our customer's demand far exceeds our ability to supply," Wei said. Related: Nvidia CEO Jensen Huang reveals secret to building tech empire Wedbush analyst Dan Ives said the "monster" numbers from TSMC were "very important data point for AI Revolution thesis and growth looking ahead. "As we said ASML is background noise," he added, referring to the European chip equipment maker's muted 2025 sales forecast from yesterday. "TSMC is what matters for tech and AI trade." Data from market research group IDC suggests generative AI spending could top $150 billion by 2027, a level that implies a compound annual growth rate of around 86% from 2023 levels. Total AI spending, meanwhile, which includes software, hardware, and services, is likely to rise from $235 billion last year to around $632 billion by 2028, according to IDC estimates. Advanced Micro Devices (AMD) , meanwhile, told investors last week that the market for AI accelerators, the chips that power large-language models used by hyperscalers such as Microsoft (MSFT) , Alphabet (GOOGL) and Meta Platforms (META) , could reach $500 billion within three years, a 25% increase from its prior forecast. Related: Goldman Sachs analyst updates Nvidia stock price target as AI grip tightens All of this puts Nvidia, and its tightening grip on the market for the chips and processors that power AI applications, in sharp focus for investors heading into the start of the tech earnings season. Nvidia told investors in late August that it saw current-quarter revenue in the region of $32.5 billion, more than double the tally from the same period last year, even as it faced some delays in shipping its new line of Blackwell processors amid design changes and supply-chain snarls. More AI Stocks: Finance chief Colette Kress said Blackwell should generate "several billion" in revenue for Nvidia's fiscal fourth quarter, which ends in January, adding that legacy Hopper sales would accelerate over the second half of the year. Nvidia shares were marked 3.23% higher in premarket trading to indicate an opening bell price of $140.10 each. TSMC shares, meanwhile, surged 8.35% to $203.13 each, extending their 2024 gain past 90%. Related: Veteran fund manager sees world of pain coming for stocks

Nvidia fever is back as AI chip stocks fuel optimistic start to Big Tech's Q3 2024 earnings season

Shares of Nvidia Corporation are once again flirting with all-times highs as investors show fresh optimism for AI-focused stocks at the start of Big Tech's third-quarter earnings season, which begins in earnest this week. The market-leading chip designer (Nasdaq: NVDIA) saw its stock rise more than 3% in premarket trading on Thursday. If it opens at that price, it will be close to its 52-week high of $140.76 a share. Nvidia's rise is likely being fueled by a strong earnings report from Taiwan Semiconductor Manufacturing Company (NYSE: TSM). As CNBC reported, the semiconductor giant saw its net profit increase 54% in the third quarter, indicating continued strong demand for the underlying infrastructure and devices that are powering the artificial intelligence boom. U.S.-listed shares of TSM were up more than 9% in premarket as of the time of this writing. The company also raised its growth outlook, as Reuters reported.