Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract manufacturer of computer chips, increased its net profit by 58 percent year-over-year in the first quarter to 572.5 billion New Taiwan dollars. The company announced this today in its earnings report. TSMC is benefiting primarily from continued strong interest in artificial intelligence (AI).
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TSMC beats expectations
The result significantly exceeded the estimates of 19 analysts, who, according to the LSEG SmartEstimate indicator, had projected earnings of 543.3 billion TWD. This indicator gives greater weight to forecasts from analysts who have a track record of greater accuracy. The company recorded double-digit profit growth for the eighth consecutive quarter, Reuters reported.
The company announced last week that it had increased revenue by 35 percent year-over-year to a record high of more than 1.13 trillion New Taiwan dollars in the quarter. Company is the world’s leading manufacturer of advanced chips for artificial intelligence and a major supplier to the U.S. company Nvidia. According to analysts, demand for TSMC’s 3-nanometer technology for manufacturing AI chips, as well as for its advanced chip packaging technology, continues to exceed the company’s current production capacity.
Revenue from advanced 3-nanometer chips now accounts for a quarter of the company’s sales, a significant increase from 6% in the third quarter of 2023. This only underscores how high demand is currently for the high-performance chips needed for AI-related computing tasks. TSMC is currently the most valuable Asian company, meaning it has the highest market capitalization of any publicly traded company in Asia. The company’s current market value stands at $1.7 trillion. TSMC is also a key supplier to the American company Apple.
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TSMC surges to record highs
Even before the results were released, TSMC shares closed today’s trading up 0.2 percent at a record 2,085 TWD. The company’s market capitalization is now nearly double that of its South Korean competitor, Samsung Electronics. Since the beginning of the year, TSMC shares have risen by nearly 35 percent, while the broader stock market in Taipei has gained approximately 28 percent.
The war in the Middle East, which the United States and Israel launched on February 28 with an attack on Iran, threatens to disrupt supplies of semiconductor manufacturing materials such as helium and neon. However, analysts view TSMC as a company that is well-prepared to weather this crisis.
TSMC is investing $165 billion in the construction of chip factories in the U.S. state of Arizona. The company has also adjusted its plans in Japan and now intends to manufacture 3-nanometer chips there instead of focusing on older manufacturing technologies.
Source: ČTK
