The foundry that manufactures cutting-edge chips for Apple, Nvidia, AMD, Broadcom and Qualcomm among others, TSMC, has released its third quarter earnings report and the busy foundry announced that its third quarter earnings rose close to 39.1% thanks to AI. The contract foundry, which builds chips for chip designers without fabrication facilities (also known as fabless), took in record net profits of 452.3 billion new Taiwan dollars ($15 billion USD) during the three months ended in September. Revenue rose 30% year-over-year.
TSMC's Q3 earnings topped forecasts
The results topped estimates of 417.7 billion new Taiwan dollars made by LSEG SmartEstimate. The latter's forecast is based on estimates made by equity analysts who have previously released earnings forecasts that turned out to be accurate.
Nvidia's H20 AI accelerator chip is made by TSMC. Image credit-Nvidia
The company, whose shares trade on the New York Stock Exchange under the symbol TSM, dropped $4.87 or 1.60% to $299.84 on Thursday. Analysts at Morningstar wrote that the foundry is so busy with its A-list clients, AI, and its new 2nm process node, tariffs on devices heading to the U.S. will not impact TSMC's results. In a note written this month, Morningstar said, "Demand for TSMC’s products is unyielding. Given TSMC's dominance, we doubt the company would be hindered if it faced tariffs on shipments to U.S. customers. We expect AI demand to stay resilient."
Recent deals by three TSMC clients will flood the foundry with revenue and profits for the immediate future
Counting on that demand for AI chips to stay heavy, TSMC hiked its forecast for its 2025 revenue growth and now expects its top line to grow in the mid 30% range in U.S. dollars for the current year. The company said that it still expects capital spending to be as high as $42 billion this year.
Can anything stop TSMC?
No. The juggernaut will continue to get bigger,
0%
Yes. A technological breakthrough might do it.
100%
Who knows?
0%
There is no question that TSMC's financial strength is, at the moment, tied to AI. Huge datacenter deals between OpenAI and chip designers like Nvidia, AMD, and Broadcom are based on those three firms producing huge amounts of chips. All three are TSMC customers so these transactions will greatly benefit TSMC in the years ahead.
The foundry's CEO C.C. Wei stated, "AI demand actually continues to be very strong - more strong than we thought three months ago. We are also happy to see a continuous strong outlook from our customers. In addition, we directly receive very strong signals from our customers requesting the capacity to support their business. Thus, our conviction in the AI megatrend is strengthening. Wei is confident that even if U.S. sanctions prevent TSMC from doing business in China, AI business will still grow strongly.
"Iconic Phones" is coming this Fall!
Good news everyone! Over the past year we've been working on an exciting passion project of ours and we're thrilled to announce it will be ready to release in just a few short months.
"Iconic Phones: Revolution at Your Fingertips" is a must-have coffee table book for every tech-head that will bring you on a journey to relive the greatest technological revolution of the 21st century. For more details, simply follow the link below!
Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
A discussion is a place, where people can voice their opinion, no matter if it
is positive, neutral or negative. However, when posting, one must stay true to the topic, and not just share some
random thoughts, which are not directly related to the matter.
Things that are NOT allowed:
Off-topic talk - you must stick to the subject of discussion
Offensive, hate speech - if you want to say something, say it politely
Spam/Advertisements - these posts are deleted
Multiple accounts - one person can have only one account
Impersonations and offensive nicknames - these accounts get banned
To help keep our community safe and free from spam, we apply temporary limits to newly created accounts:
New accounts created within the last 24 hours may experience restrictions on how frequently they can
post or comment.
These limits are in place as a precaution and will automatically lift.
Moderation is done by humans. We try to be as objective as possible and moderate with zero bias. If you think a
post should be moderated - please, report it.
Have a question about the rules or why you have been moderated/limited/banned? Please,
contact us.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed:
To help keep our community safe and free from spam, we apply temporary limits to newly created accounts: