Today’s News
Taiwan Semiconductor Manufacturing Co (TSMC), a leader in producing advanced chips for artificial intelligence applications, is poised to announce a 30% increase in second-quarter profits this Thursday, driven by a robust demand for AI chips.
Image Source: FMT Media
Analysts predict the company will report a net profit of TWD 236.1 billion (USD 7.25 billion), up from last year’s TWD 181.8 billion (USD 5.58 billion) during the same period, according to a LSEG SmartEstimate that prioritizes more accurate analysts.
TSMC’s stock price, along with the broader Taiwan market, has reached record highs due to the surge in AI technology adoption, with its American Depositary Receipts recently exceeding a trillion-dollar market value. Last week, TSMC reported substantial revenue growth for the quarter, surpassing market expectations.
“I expect the third quarter outlook for all of their products to be very good,” said Li Fang-kuo, Chairman of President Capital Management Co.
Image Source: Reuters
During its upcoming earnings call, TSMC is expected to provide updates on its forecast for the current quarter and the entire year, including details on its aggressive capital expenditure plans aimed at expanding production capabilities. Despite its global expansion, including a USD 65 billion investment in three U.S. plants in Arizona, TSMC confirms that the bulk of manufacturing will remain in Taiwan.
Previously, in April, TSMC announced it would maintain its capital expenditure for the year between USD 28 billion and USD 32 billion, earmarking 70% to 80% of this budget for advanced technologies.
KGI Securities Investment Advisory Co Chairman Chu Yen-min suggested that TSMC might increase its capital expenditure, noting, “There are many positive factors which will help their stock price and support the broader market.”
The surge in AI technology has significantly boosted TSMC’s stock, with shares soaring 75% this year, reaching record highs. The company, often referred to as the “sacred mountain protecting the country” due to its pivotal role in Taiwan’s economy, faces minimal competition. However, giants like Intel and Samsung are making moves to challenge its dominance.
(USD 1 = 32.5480 Taiwan dollars)
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