Taiwan Semiconductor Manufacturing Co (TSMC) the main producer of advanced chips used in artificial intelligence applications, is expected to report a 30% surge in Q2 profit on Thursday. The surge in TSMC profit is thanks to soaring demand.
The world’s largest contract chipmaker TSMC, whose customers include Apple and Nvidia has benefited with profit from a surge towards AI chip . This surge has pushed TSMC’s stock and the broader Taiwan market to record highs. Last week, its American Depositary Receipts topped a trillion dollar market value.
TSMC net profit
TSMC is set to report a net profit of T$236.1 billion ($7.25 billion) for the Q2 ended on June 30, according to a LSEG SmartEstimate drawn from 20 analysts. That estimate compares to TSMC’S 2023 Q2 net profit of T$181.8 billion.
TSMC last week reported a jump in Q2 revenue, comfortably beating market expectations.
TSMC outlook
“I expect the third quarter outlook for all of their products to be very good,” said President Capital Management Co Chairman Li Fang-kuo.
TSMC, at its quarterly earnings call at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure as it races to expand production.
TSMC’s expansion
TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan.
On its last earnings call in April, TSMC maintained its guidance for capital spending this year at $28 billion to $32 billion, compared with last year’s $30.45 billion, and said 70% to 80% of that would go towards advanced technologies.
“TSMC could raise their capital spending,” said KGI Securities Investment Advisory Co Chairman Chu Yen-min. “There are many positive factors which will help their stock price and support the broader market.”
TSMC’s AI chip demand
The AI boom has helped drive up the price of shares in Asia’s most valuable company, with TSMC’s Taipei-listed stock leaping 75% so far this year to historic highs, compared with a 33% gain for the broader market.
TSMC, colloquially referred to the “sacred mountain protecting the country” for its critical role in Taiwan’s export-dependent economy, faces little competition, though both Intel and Samsung are trying to challenge that dominance.
TSMC’s share price
Share price of TSMC opened at $187.35 on Friday. Taiwan Semiconductor Manufacturing Company Limited has a one year low of $84.01 and a one year high of $193.47. TSMC stock has a 50-day moving average of $165.18 and a 200-day moving average of $140.45.
