Item 1 of 2 People visit TSMC Museum of Innovation in Hsinchu, Taiwan on May 29, 2024. REUTERS/Ann Wang/File Photo
TAIPEI, Oct 17 (Reuters) – TSMC, the world’s largest contract chipmaker, said on Thursday it expects strong growth in its business to continue as it reported a forecast 54% rise in quarterly profit due to rising demand for chips used in artificial intelligence (AI).
At its quarterly earnings call on Thursday, TSMC said it expects capital spending this year to be slightly higher than $30 billion, compared with a previous forecast of $30 billion to $32 billion, as the company races to expand production.
The chipmaker is spending billions of dollars building new factories abroad, including $65 billion on three factories in the US state of Arizona, although it has said most production will remain in Taiwan.
It said Thursday that it expects the first plant in Arizona to begin volume production in 2025, while the second plant there should begin volume production in 2028. It predicts the third plant in Arizona will begin volume production by the end of the decade.
It forecast fourth-quarter revenue of $26.1 billion to $26.9 billion, compared with $19.62 billion in the same period of 2023.
The chip industry bellwether earlier on Thursday reported a net profit of T$325.3 billion ($10.11 billion) for the quarter ended September 30, the highest for any quarter, compared with the T$300.2 billion forecast by a LSEG SmartEstimate from 22 analysts. . SmartEstimates give more weight to analyst forecasts that are more consistently accurate.
TSMC, Asia’s most valuable listed company, said third-quarter revenue rose 36% year-on-year to $23.5 billion, better than the company’s previous forecast of $22.4 billion to $23.2 billion. The company last week announced third-quarter revenue in Taiwan dollars of T$759.69 billion.
Capital expenditures in the third quarter were $6.4 billion, TSMC said, compared with $6.36 billion in the second quarter.
The second half of the year is traditionally the peak season for Taiwanese tech companies as they rush to supply customers ahead of the year-end holiday season in key Western markets.
($1 = 32.1700 Taiwan dollars)
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Reporting by Yimou Lee, Ben Blanchard and Faith Hung; Editing by Christopher Cushing and Muralikumar Anantharaman
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