The TSMC stock price (NYSE:TSM) has hit new 52 week highs in trading today of $194.25., marking a 90% gain year-to-date as the broader market continues its upward momentum ahead of earnings season. As the world's leading semiconductor foundry, TSMC is projected to report a substantial rise in third-quarter net profits on October 17, driven by strong demand for AI chips. Analysts estimate a 40% increase in net profits, potentially reaching T$298.2 billion ($9.27 billion).

This is expected to come on an EPS of T$11.52, and revenues of T$750.21B on the quarter. The firm has beaten in both the previous quarters, with expectations continuing to build as execution holds firm.
 

TSMC’s remarkable growth 

The company's remarkable growth trajectory can be attributed to the escalating need for artificial intelligence chips that power a variety of cutting-edge technologies and applications. TSMC's strong ties with prominent industry players like Apple, Nvidia, AMD, and Qualcomm have further reinforced its market position and financial performance, enabling the company to exceed revenue expectations.

TSMC has been particularly successful in capitalizing on the strong sales of its advanced chips, which in turn has reflected positively on the company's stock.

TSMC, the semiconductor giant, is not standing still. The company is making significant investments in capacity expansion to maintain its market leadership and meet future demand. It has allocated $65 billion for the construction of three new plants in Arizona, part of its broader strategy to expand globally. Additionally, TSMC is exploring expansion in Europe, with a strong emphasis on supporting the AI chip sector. These moves highlight the company's commitment to leveraging growth opportunities in emerging semiconductor technologies.
 

Third-quarter profit seen jumping 40% on strong AI chip demand

Taiwan Semiconductor Manufacturing Co (2330.TW), the leading producer of advanced chips for artificial intelligence applications, is projected to post a 40% jump in third-quarter profit on Thursday, driven by soaring demand. As the world's largest contract chipmaker, TSMC counts major companies like Apple (AAPL.O) and Nvidia (NVDA.O) among its customers, benefiting from the rapid shift toward AI. According to a LSEG SmartEstimate based on input from 22 analysts, TSMC is expected to report a net profit of T$298.2 billion ($9.27 billion) for the quarter ending September 30, with the SmartEstimate emphasizing more reliable analyst forecasts.

Last week, TSMC reported a strong increase in third-quarter revenue in Taiwan dollars, surpassing market expectations. The company typically provides its revenue outlook in U.S. dollars during its earnings conference. "Many of TSMC's key clients, such as Apple, Nvidia, AMD, Qualcomm, and Mediatek, are rolling out new products that heavily depend on TSMC's advanced process technologies," said Li Fang-kuo, chairman of President Capital Management.

"TSMC's third-quarter earnings will significantly surpass expectations," Li added. During its quarterly earnings call at 0600 GMT on Thursday, TSMC will provide an updated outlook for the current quarter and the full year, including adjustments to its capital expenditure as it continues to expand production. The company is investing billions in new overseas facilities, including $65 billion for three plants in Arizona, although the majority of its manufacturing will remain in Taiwan. In its previous earnings call in July, TSMC raised its full-year revenue forecast and revised its capital expenditure for 2024 to a range of $30 billion to $32 billion, up from the earlier estimate of $28 billion to $32 billion.