Global Market: TSMC set for sixth straight record quarterly profit on AI chip boom

The strong demand has propelled TSMC, a key supplier to Nvidia and Apple, to new heights.

Analysts said demand for TSMC's advanced chipmaking capacity and its chip-on-wafer-on-substrate (CoWoS) packaging technology remains robust, as technology companies continue to invest heavily in AI infrastructure.

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The strong demand has propelled TSMC, a key supplier to Nvidia and Apple, to new heights, with its market capitalisation reaching around $2 trillion, nearly twice that of South Korean rival Samsung Electronics.

TSMC is expected to report a 65% year-on-year increase in third-quarter net profit to T$746.3 billion ($23.4 billion), according to an LSEG SmartEstimate compiled from 16 analysts. The methodology gives greater weight to forecasts from analysts with a stronger track record of accuracy, as per the report.

Any quarterly net profit above T$706.56 billion would set a new record for the company and mark its 11th consecutive quarter of profit growth.

Last week, TSMC reported a 50% year-on-year increase in third-quarter revenue, beating market expectations and reaching a record high.

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Investors will closely watch the company's earnings call, scheduled for 0600 GMT on Thursday, for its fourth-quarter outlook and updated full-year guidance. The results come amid concerns that further US Federal Reserve interest rate hikes could weigh on AI-related stocks, which are sensitive to higher borrowing costs.

TSMC's Taipei-listed shares fell 2% in morning trading on Thursday, while Taiwan's benchmark stock index declined around 3%.

The company has been expanding its global manufacturing footprint to meet growing demand for advanced semiconductors. TSMC is investing $265 billion in chip manufacturing facilities in Arizona, including an additional $100 billion investment announced in July.

Reuters reported in September that TSMC was evaluating a potential investment in Texas. Tesla CEO Elon Musk also said last week that his companies would build and operate the Terafab AI chip complex, with TSMC potentially subleasing part of the facility.

TSMC raised its capital expenditure forecast for 2026 to between $60 billion and $64 billion at its July earnings call, up from an earlier projection of $52 billion to $56 billion, reflecting its expanding investment plans, as per the report.

Signs of sustained demand across the semiconductor supply chain have also eased concerns about a slowdown in AI spending. ASML, the world's largest maker of equipment used to manufacture advanced semiconductors, said on Wednesday that customers were already looking to place orders for 2029 and 2030. TSMC shares have gained 57% so far this year, broadly tracking the rally in Taiwan's equity market, whose benchmark index has advanced 62% over the same period, the report stated.