TSMC’s Q3 Profit Expected to Skyrocket as AI Demand Soars

• Taiwan Semiconductor Manufacturing Co. (TSM) anticipates a record 28% third-quarter net profit increase to T$415.4 billion ($13.6 billion), driven by surging AI chip demand from clients like Nvidia (NVDA), AMD (AMD), and Apple (AAPL).
• With a market capitalization of $1.22 trillion, TSMC projects 30% to 35% full-year revenue growth and has committed $165 billion to U.S. facilities amid tariff uncertainties, including a proposed 50-50 production split rejected by Taiwan.
• TSMC shares have risen 42% year-to-date, boosting Taiwan’s benchmark index by 17%, as AI infrastructure investments outweigh trade concerns ahead of Thursday’s earnings report.

Taiwan Semiconductor Manufacturing Co. (TSM), the preeminent foundry in the semiconductor industry, continues to anchor the global supply chain for advanced artificial intelligence processors, serving as the primary fabrication partner for leading designers including Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD), and Apple Inc. (AAPL). As demand for high-performance computing escalates, TSMC’s operational prowess positions it to capitalize on this surge, with projections indicating a 28% increase in third-quarter net profit to a record T$415.4 billion, equivalent to approximately $13.6 billion at prevailing exchange rates. This forecast, derived from an LSEG SmartEstimate aggregating insights from 20 analysts who emphasize accuracy in their predictions, underscores the company’s resilience amid intensifying geopolitical pressures.

The anticipated profit figure surpasses the threshold of T$398.3 billion ($13 billion), which would establish a new benchmark for quarterly earnings and extend TSMC’s streak to seven consecutive quarters of expansion. Complementing this, the firm has already signaled a 30% year-over-year revenue uptick for the period ended September 30, outpacing market consensus. Looking ahead, industry observers anticipate TSMC’s full-year revenue to expand by at least 30% to 35%, driven by unrelenting investments in AI infrastructure from hyperscalers and equipment makers. Mario Morales, group vice president at IDC, highlighted to Reuters TSMC’s structural advantages, noting that frontrunners like Nvidia and AMD rely exclusively on its facilities for cutting-edge nodes, ensuring sustained outperformance relative to competitors.

This dominance is reflected in TSMC’s stature as Asia’s most valuable listed entity, boasting a market capitalization of $1.22 trillion/last $295.06 p/sh – roughly triple that of Samsung Electronics Co. Ltd., its closest South Korean counterpart. Yet, external variables loom large, particularly U.S. tariff policies under President Donald Trump, which impose a 20% levy on Taiwanese exports to the United States, though semiconductors remain exempt for now. Last month, U.S. Secretary of Commerce Howard Lutnick advocated for a balanced production split, urging Taiwanese firms to allocate 50% of chip output between Taiwan and the U.S., a proposal firmly rebuffed by Taiwanese authorities. In response, TSMC has committed $165 billion to constructing fabrication plants in Arizona, a strategic diversification that mitigates risks from regional tensions while bolstering its North American footprint.

These developments have not deterred investor confidence, as evidenced by TSMC’s shares climbing more than 40% year-to-date, fueled by AI enthusiasm and largely undaunted by trade frictions. This performance has been instrumental in propelling Taiwan’s benchmark index to a 16.9% gain over the same interval. Investors await the official results on Thursday, alongside fourth-quarter guidance during an earnings call at 0600 GMT, where clarifications on tariff implications and capacity ramp-ups could further shape sector trajectories. TSMC’s trajectory exemplifies the semiconductor sector’s evolution, where technological leadership intersects with macroeconomic headwinds, yet the foundational demand for AI enablers appears poised to prevail.

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