Taiwan Semiconductor Manufacturing Co. (TSMC), the leading manufacturer of advanced chips essential for artificial intelligence applications, is poised to announce a robust 30% increase in second-quarter profit on Thursday, buoyed by surging global demand.
The world’s largest contract chipmaker, whose clientele includes tech giants like Apple and Nvidia, has reaped significant benefits from the growing adoption of AI technologies.
According to a SmartEstimate derived from 21 analysts, TSMC is expected to post a net profit of T$238.8 billion for the quarter ending June 30, up from T$181.8 billion reported in the same quarter last year. SmartEstimates prioritize forecasts from consistently accurate analysts.
Despite achieving record highs in its stock price and the broader Taiwan market, TSMC saw its shares decline by 2.4% on Wednesday. This drop followed remarks from U.S. Republican presidential candidate Donald Trump, who suggested that Taiwan should compensate the U.S. for its defense support, citing Taiwan’s significant role in the semiconductor industry.
TSMC’s American Depository Receipts (ADRs) fell by 8% in response to the market reaction.
Last week, TSMC reported a substantial increase in second-quarter revenue denominated in Taiwan dollars, surpassing market expectations. The company is set to provide guidance for third-quarter revenue in U.S. dollars.
On Wednesday, ASML, the world’s largest supplier of chipmaking equipment, reported earnings for the second quarter that exceeded expectations.
During its quarterly earnings call scheduled for Thursday at 0600 GMT, TSMC will update its outlook for the current quarter and the full year, including capital expenditure plans aimed at expanding production capacities. The company is currently investing billions in constructing new factories overseas, notably $65 billion allocated for three plants in Arizona, USA, while maintaining the majority of its manufacturing in Taiwan.
In April, TSMC reaffirmed its capital spending guidance for the year at $28 billion to $32 billion, with 70% to 80% directed towards advanced technologies, compared to $30.45 billion spent last year.
The latter half of the year traditionally marks the peak season for Taiwanese tech firms as they gear up to meet demand ahead of the year-end holidays in major Western markets.
The surge in demand for AI technologies has driven a significant increase in TSMC’s stock price, with its Taipei-listed shares rising by 74% this year to reach historic highs, outpacing the broader market’s 31% gain.
Renowned in Taiwan as the “sacred mountain protecting the country” due to its crucial role in the nation’s export-driven economy, TSMC faces limited competition, although rivals like Intel and Samsung are striving to challenge its market dominance.
