TSMC posts record profit for sixth straight quarter, beating estimates on AI boom

Taiwan Semiconductor Manufacturing Company. on Thursday reported record third-quarter profit, beating estimates, fueled by a relentless global appetite for AI chips.

Here are TSMC’s third-quarter results compared to LSEG’s SmartEstimates, which are weighted based on more precise analyst forecasts:

• Revenue: NT$1.49 trillion ($46.36 billion) vs. NT$1.47 trillion
• Net profit: NT$763.1 billion versus NT$746.34 billion expected

The world’s largest contract chipmaker posted record net profit for a sixth consecutive quarter, rising 68.7% in the reported quarter from a year earlier.

TSMC’s third-quarter operating margin came in at 58.7%, exceeding the upper end of its 58% guidance range, demonstrating the pricing power the company enjoys as the AI ​​boom fuels demand for semiconductors.

By technology, 3-nanometer chips accounted for the largest share of its revenue in the third quarter at 33%, followed by 5-nanometer and 7-nanometer chips.

By platform, high-performance computing accounted for the largest share of revenue at 68%, followed by smartphones at 21%. Meanwhile, automotive was the fastest growing segment quarter-over-quarter, with a growth rate of 23%.

The company’s free cash flow jumped to NT$476.56 billion in the third quarter from NT$139.38 billion a year ago.

TSMC’s board of directors approved a cash dividend of NT$7.00 for the second quarter. When announcing its second-quarter results in July, TSMC outlined plans to expand its manufacturing footprint in the United States, including a total planned investment of $265 billion in Arizona.

The chipmaker is also reportedly considering expanding beyond Arizona, evaluating a potential investment in Texas as it looks to further strengthen its U.S. manufacturing presence.