The world's largest foundry, Taiwan's TSMC, reported a record net profit for the second quarter of this year, driven by increased demand for artificial intelligence (AI) chips.
According to Yonhap News on July 16, TSMC's net profit for the second quarter (April to June) reached 706.6 billion New Taiwan dollars (approximately $32.5 billion), a 77% increase from the same period last year.
This marks the ninth consecutive quarter of double-digit net profit growth for TSMC. The company's earnings significantly surpassed the market forecast of 632.6 billion New Taiwan dollars (about $29.1 billion), based on estimates from 18 analysts compiled by financial information provider LSEG.
On July 13, TSMC announced that its consolidated revenue for the second quarter rose 36% year-on-year to 1.27 trillion New Taiwan dollars (approximately $58.6 billion), also exceeding market expectations and setting a new record.
TSMC anticipates continued demand for AI chips and has raised its performance and investment outlook for the year.
The revenue forecast for the third quarter is projected to be significantly higher than last year's $33.1 billion, estimated between $44.6 billion and $45.8 billion (approximately $65.8 billion to $67.6 billion). The annual revenue growth forecast has also been increased from the previous 30% range to 40%.
The annual capital expenditure forecast has been raised from the previous $50 billion range to between $60 billion and $64 billion (approximately $88.7 billion to $94.6 billion). This capital expenditure outlook is seen as a key indicator of management's confidence in the sustainability of AI demand.
Wendell Huang, TSMC's Chief Financial Officer, stated after the earnings announcement, "Our confidence in the AI megatrend is very strong," adding that investments over the next three years will be significantly higher than in the past three years.
TSMC also announced plans for additional investments to expand semiconductor production capacity in the United States. Chairman Mark Liu mentioned during the earnings conference call that the company plans to invest an additional $100 billion (approximately $147.8 billion) in Arizona, a decision aimed at supporting strong long-term demand from major U.S. customers.
Liu added, "We believe this investment will promote the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and help expand high-wage jobs in advanced technology sectors in the U.S."
Last March, TSMC announced plans to invest a total of $165 billion (approximately $243.8 billion) to establish wafer fabrication plants, packaging facilities, and research and development centers in the U.S.
With this additional investment, TSMC's total investment in the U.S. will reach $265 billion (approximately $391.7 billion).
The market is seeing strong demand for TSMC's 3-nanometer and 2-nanometer process technologies used in AI chips, as well as robust demand for advanced semiconductor packaging technology known as Chip on Wafer on Substrate (CoWoS).
TSMC, which counts NVIDIA and Apple among its major customers, plays a crucial role in producing advanced semiconductors used in NVIDIA's AI accelerators.
Thanks to this growth, TSMC, the largest company by market capitalization in Asia, has seen its market value swell to approximately $1.97 trillion (about 2,921 trillion won). Reuters reported that TSMC's market capitalization is about double that of its global competitor Samsung Electronics, which stands at around 1,492 trillion won.
* This article has been translated by AI.
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