TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co., the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 30 percent jump in second-quarter profit on Thursday on surging demand.
The world’s largest contract chipmaker, whose clients include Apple (NASDAQ:) and Nvidia (NASDAQ:), has benefited from the boom in artificial intelligence.
Taiwan Chipmaker is set to report net income of NT$238.8 billion for the quarter ended June 30, according to LSEG SmartEstimate estimates based on 21 analysts. SmartEstimate estimates give greater weight to forecasts from consistently more accurate analysts.
This estimate compares to net profit in the second quarter of 2023 of NT$181.8 billion.
While TSMC stock — and the broader Taiwan market — has hit record highs, it fell 2.4% on Wednesday after Republican presidential candidate Donald Trump said Taiwan “took about 100% of our chip business” and should pay the United States for its defense because it gives the country nothing.
TSMC’s American depositary receipts fell 8% on Wednesday.
TSMC last week reported a rise in second-quarter revenue in Taiwanese dollars, comfortably beating market expectations. The company will provide third-quarter revenue guidance in U.S. dollars.
ASML (AS:), the world’s largest supplier of chipmaking equipment, reported better-than-expected second-quarter earnings on Wednesday.
TSMC, in its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as the full year, including its capital expenditures, as it accelerates production expansion.
TSMC is spending billions of dollars building new factories overseas, including $65 billion on three plants in Arizona, although it has said most manufacturing will remain in Taiwan.
In its last earnings call in April, TSMC maintained its guidance for capital spending this year at $28 billion to $32 billion, compared with $30.45 billion last year, and said 70% to 80% of the total would go toward advanced technologies.
The second half of the year is traditionally the peak season for Taiwanese tech companies as they race to supply customers ahead of the year-end holiday season in major Western markets.
The AI boom has helped lift the share price of Asia’s most valuable company, with TSMC’s Taipei-listed shares jumping 74% so far this year to historic highs, compared with a 31% gain for the broader market.
TSMC, referred to in Taiwan as the “sacred mountain that protects the country” for its crucial role in Taiwan’s export-reliant economy, faces little competition, though both Intel (NASDAQ:) and Samsung (KS:) are trying to challenge its dominance.
