(Oct 15): Taiwan Semiconductor Manufacturing Co (TSMC) reported a better-than-expected profit for the September quarter, sustaining torrid growth despite rising concern about the long-term artificial intelligence (AI) buildout.
The global chipmaking linchpin said net income rose 69% to NT$763.1 billion (US$23.6 billion or RM96.2 billion), more than the average analyst estimate. That came after the company reported a sales jump of 51% in the period, also above expectations, taking its revenue across the three months to US$47 billion (RM191.8 billion).
The exclusive chipmaker of Nvidia Corp and Apple Inc’s most advanced semiconductors, TSMC offered a counterpoint to increasingly negative sentiment around AI-linked names. Downstream from the chipmaker, worries about return on investments and long-term financing are hurting companies like cloud provider and Nvidia customer CoreWeave Inc, which on Wednesday saw its stock and bond prices plunge in a widespread sell-off.
TSMC, for its part, has seen sales growth accelerate over the past two quarters and has ramped up capacity expansion. The company has said its capital expenditures will reach as much as US$64 billion, a record, this year.
Hsinchu-based TSMC serves as a key barometer of global AI demand as every major industry player including Nvidia, Advanced Micro Devices Inc and Alphabet Inc’s Google rely on the Taiwanese chipmaker to turn their most cutting-edge designs into physical components.
TSMC’s shares touched a record this month, among the first chip stocks globally to set a new high after a July market rout. It’s been outperforming peers thanks to a dominant position in the manufacturing of processors needed to power AI. Yet it got caught up in the broader pullback in tech stocks over the past week.
Consensus estimates have been climbing for the Taiwanese firm’s 2027 capital spending, a key indicator for the industry. Goldman Sachs Group Inc now targets US$85 billion and UBS Group AG US$90 billion, compared with the US$75 billion average of firms polled by Bloomberg.
The company is now trying to build and furnish about 20 factories at home and overseas, an unprecedented pace for a company that typically works on four or five new buildings simultaneously.
On top of its US$265 billion pledge to build a campus in Arizona, the company is now considering an additional US site in Texas due to the rush in the US to build data centres, Bloomberg News has reported.
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