TSMC, the main producer of cutting-edge chips used in artificial intelligence applications, is expected to report a 30% increase in second-quarter profit as a result of increasing demand.
The primary manufacturer of cutting-edge chips used in artificial intelligence applications, Taiwan Semiconductor Manufacturing Co. (TSMC), is anticipated to publish a 30% increase in second-quarter profit on Thursday due to rising demand. The largest contract chipmaker in the world, TSMC’s stock (.TWII), and the Taiwan market as a whole have surged to record highs due to AI, and its clients include Apple (AAPL.O), which opens a new tab, and Nvidia (NVDA.O). Its American depositary receipts exceeded a trillion dollars in market value last week.
Based on an LSEG SmartEstimate derived from 20 analysts, TSMC is expected to record a net profit of T$236.1 billion ($7.25 billion) for the quarter that concluded on June 30. Forecasts from analysts with higher consistency of accuracy are given more weight by SmartEstimates. This forecast is in contrast to the T$181.8 billion net profit for the second quarter of 2023. Last week, TSMC announced a rise in sales for the second quarter, handily surpassing the expectations of the market.
“I anticipate a very positive outlook for all of their products for the third quarter,” stated Li Fang-kuo, President and Chairman of Capital Management Co. TSMC will provide an update on its outlook for the current quarter and the entire year, including its capital expenditures as it strives to grow output, during its quarterly results call on Thursday at 0600 GMT. Though it claims that the majority of manufacturing will continue in Taiwan, TSMC is investing billions of dollars in the construction of new factories abroad, including $65 billion on three sites in the U.S. state of Arizona.
TSMC stated that 70% to 80% of its capital expenditure this year would go into advanced technologies during its most recent earnings call in April. The company had previously stated that it would spend $28 billion to $32 billion on capital projects, up from $30.45 billion the previous year. According to Chu Yen-min, co-chairman of KGI Securities Investment Advisory, “TSMC could increase their capital spending.” “There are many positive factors that will help their stock price and support the broader market.”
The most valuable firm in Asia has seen a rise in share prices due to the AI boom; TSMC’s Taipei-listed stock has risen 75% this year to all-time highs, while the market has gained 33%. TSMC, known as the “sacred mountain protecting the country” due to its crucial position in Taiwan’s export-driven economy, has minimal competition, despite attempts to challenge its supremacy by Intel (INTC.O.) and Samsung (005930.KS).
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