Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, reported a 69 percent increase in third-quarter net profit year on year, as demand for artificial intelligence (AI) infrastructure chips continues to surge. The company’s net profit reached NT$763.1 billion ($23.6 billion), while revenue rose 51 percent to NT$1.5 trillion.
TSMC plays a central role in the semiconductor industry’s current upcycle, manufacturing more than 90 percent of the world’s leading-edge chips. The company supplies major technology firms including Nvidia and Apple and maintains a significant lead over competitors Samsung and Intel in advanced manufacturing technologies.
Finance chief Wendell Huang confirmed that capital expenditure for 2024 would remain in the $60 billion to $64 billion range. However, he projected a substantial increase in spending from 2026 to 2028, driven by sustained, robust demand for semiconductors.
Chief Executive CC Wei emphasized TSMC’s commitment to expanding capacity, stating the company is “doing everything we can, whenever we can, as fast as we can to maximise the support to our customers.” He added that the company intends to capture “every piece of business possible,” signaling a focused effort to maintain its market dominance.
Despite TSMC's strong earnings, its shares declined 2 percent ahead of the earnings announcement amid a broader AI-driven sell-off in Asian markets. Still, the stock has surged nearly two-thirds over the past year, making TSMC Asia’s most valuable company with a market capitalization approaching $2 trillion—almost double that of Samsung.
AI-related chip manufacturing remains a key driver of TSMC’s profit growth. The company's high-performance computing segment, which includes data center chips, AI accelerators, and various central processing units (CPUs), continues to expand rapidly. Notably, TSMC’s advanced 2-nanometer process technology accounted for 8 percent of wafer revenue in the third quarter, up significantly from the first quarter.
For the fourth quarter, TSMC projected revenue between $52.3 billion and $54.3 billion, with an operating profit margin ranging from 56.5 percent to 58.5 percent. Wei noted that while there is no upper limit to TSMC’s profitability, any dramatic increase will take time to materialize.
To meet growing demand, TSMC is expanding production capacity, including a major $265 billion facility under development in Arizona. The company is also considering establishing another site in Texas. Additionally, TSMC has engaged in discussions with Terafab, a proposed Tesla-SpaceX chip factory initiated by Elon Musk, exploring potential utilization of Terafab’s extra manufacturing capacity.