TSMC Surpasses $1 Trillion as Cutting-Edge Technology Fuels Record Growth
AInvestThursday, Oct 17, 2024 5:00 pm ET
1min read
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Taiwan Semiconductor Manufacturing Company (TSMC) has reported robust third-quarter financial results, exceeding market expectations, and driving its market capitalization past the $1 trillion mark. The semiconductor giant's performance underscores its leading position in the global chip manufacturing industry, showcasing both its technological prowess and its ability to navigate complex market dynamics.

TSMC's Q3 revenue reached 7596.9 billion New Taiwan dollars, or approximately $235 billion, reflecting a 39% year-on-year increase. The company's net profit also saw a substantial rise, totaling 3252.58 billion New Taiwan dollars, which is a 54.2% year-on-year growth. These figures surpassed forecasts, highlighting TSMC's strong demand amid a booming semiconductor market driven by advances in artificial intelligence, 5G, and IoT technologies.

The company's groundbreaking advancements in 3nm and 5nm process technologies have played a pivotal role in its financial success. High demand for these sophisticated chips from industries such as smartphones and high-performance computing has significantly contributed to its bottom line. In particular, advanced processes, defined by TSMC as 7nm and below, accounted for 69% of its wafer revenues for the quarter, compared to 67% in the previous period.

Regionally, TSMC has seen a notable increase in its North American market share, now comprising 71% of its revenue. This shift reflects the growing demand for its chips in this region, particularly as TSMC continues to be a key supplier to prominent clients like NVIDIA and Apple, whose products heavily rely on TSMC's leading-edge technology.

Looking ahead, TSMC anticipates fourth-quarter revenues between $261 billion and $269 billion, also exceeding market predictions. The company projects a gross margin between 57% and 59%, further demonstrating its ability to sustain profitability despite broader market uncertainties. TSMC also indicated plans for capital expenditures over $300 billion in 2024, bolstering its long-term growth strategy.

TSMC's stellar quarter has provided reassurance amidst market concerns about the potential slowdown of AI chip demand. The company's ongoing collaborations with AI innovators like NVIDIA underscore its critical role in the sector. As TSMC continues to outperform expectations, it solidifies its status as a formidable force in the technology industry.

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