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Taiwan’s TSMC to report massive third-quarter profit, bolstered by AI chip boom and growing global tech demand

Taiwan Semiconductor Manufacturing Co. will report a 42% gain in third-quarter profit, boosted by booming demand for chips for artificial intelligence. The World's largest contract chipmaker, whose clients include tech industry leaders such as Apple and Nvidia, will stay at the head of advanced chip production.

According to an LSEG SmartEstimate based on 23 analysts, TSMC is expected to report a net profit of T$300.1 billion ($9.33 billion) for the quarter ended September 30. This would be a more than significant increase in the T$211 billion the firm reported in profit in the same period of 2023. This growth is due to rising demand for AI across various sectors, which is compelling TSMC to outperform its expectations on Taiwan-dollar-denominated revenue last week.

However, the world's chip market has much to overcome. ASML, the largest supplier of chipmaking equipment to TSMC, reported weaker-than-expected sales and bookings for 2025, partly due to weakness that has persisted in some segments of the market. That news meant a drastic drop in ASML's shares fell 22% at one point-the biggest single-day decline since 1998. And on Wednesday, shares for TSMC plunged 2.3% to close at T$1,045, just a little under their all-time high of T$1,080 on July 11.

TSMC will be presenting its updated outlook for the current quarter and the full year during its earnings call on Thursday at 0600 GMT. It will also mention revenue guidance for the fourth quarter in US dollars besides laying out more details of its capital expenditure as it continues to execute its aggressive expansion plans.

TSMC is investing billions into new overseas manufacturing plants, including the three gigantic factories in Arizona, US, that will cost $65 billion. Even as it is expanding, the chipmaker TSMC has continually reassured stakeholders that most of its production will stay in Taiwan. During its last earnings call for July, last week, TSMC hiked its full-year revenue forecast and adjusted its capital expenditure to between $30 billion and $32 billion from an earlier estimate that had been pegged at $28 billion to $32 billion.

TSMC stock has surged by as much as 76% year-to-date as artificial intelligence begins its transformation of industries. It outperformed the overall Taiwanese market, which increased by 28%. TSMC’s dominant role in Taiwan’s tech-driven economy has earned it the nickname "the sacred mountain protecting the country." While Intel and Samsung are vying for a piece of the market, TSMC remains the undisputed leader in advanced chip manufacturing.