TSMC sees 30% surge in Q2 profit

Taiwan Semiconductor Manufacturing Company (TSMC), the leading producer of advanced chips for artificial intelligence applications, is expected to announce a 30 per cent increase in second-quarter profit on Thursday due to high demand.

The world’s largest contract chipmaker, serving tech giants like Apple and Nvidia, has seen its stock and the broader Taiwan market reach record levels amid the AI boom. Recently, its American Depositary Receipts surpassed a trillion-dollar market value.

TSMC’s net profit for the quarter ending June 30th is projected to reach T$236.1 billion, a significant increase from the previous quarter’s T$181.8 billion. The company also exceeded market expectations with its second-quarter revenue, according to a LSEG SmartEstimate.

Market observers are optimistic about TSMC’s future. Li Fang-kuo, Chairman of President Capital Management Co., expects a strong third-quarter outlook for all products.

TSMC will provide updates during its earnings call on Thursday at 06:00 GMT, including guidance for the current year and capital expenditure plans for production expansion. The company is aggressively investing in new factory construction worldwide, including a multi-billion-dollar project for three plants in Arizona, USA. Despite this global expansion, it emphasises that Taiwan would remain the primary manufacturing hub.

In April, TSMC confirmed its capital spending forecast for 2024 at $28-32 billion, exceeding the $30.45 billion spent in 2023. Most of these funds, 70-80 per cent, will be allocated to advancing chip technologies.

The company’s stock price has surged 75 per cent this year, outperforming the market’s 33 per cent gain, thanks to the AI boom. TSMC is considered Asia’s most valuable company and plays a crucial role in Taiwan’s export-driven economy.

Attribution: Reuters