Taiwan Semiconductor’s Profit Rises 54% As A.I. Demand Soars

Taiwan Semiconductor Manufacturing Co. (TSM) has reported a 54% rise in its net profit for this year’s third quarter as global demand for artificial intelligence (A.I.) microchips skyrockets.

TSMC, as the company is commonly known, is the world’s largest manufacturer of microchips and semiconductors, accounting for three-quarters (75%) of the global supply.

The Taiwan-based company reported net income, or profit, of 325.3 billion Taiwanese dollars ($10.1 billion U.S.) for the July through September quarter, which was up more than 50% from a year ago and ahead of the $300.2 billion Taiwanese dollars forecast among analysts.

Revenue in the quarter totaled $23.5 billion U.S., up 36% year-over-year. TSMC also reported a gross margin of 57.8% compared to 54.3% a year ago.

The strong results sent TSMC’s stock up 7% in pre-market trading and lifted other semiconductor stocks higher as well.

Management attributed the Q3 results to “strong smartphone and AI-related demand for our industry leading 3nm and 5nm technologies.”

Looking ahead, TSMC said that it expects revenue in the current fourth quarter of $26.1 billion U.S. to $26.9 billion U.S., which would represent a 35% year-over-year increase at the midpoint.

The company also raised its forecast for its capital expenditures this year to about $30 billion U.S. TSMC is increasing its manufacturing presence worldwide, investing $65 billion U.S. to build three chip plants in Arizona to help meet America’s chip demand.

Prior to today (Oct. 17), the stock of TSMC had risen 85% this year to trade at $187.48 U.S. per share.