TSMC Q3 profit jumps 69% to record $23.6 billion
What's the story
Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, has reported a record third-quarter profit, beating estimates. The surge is largely attributed to the global demand for artificial intelligence (AI) chips. TSMC's revenue for the quarter stood at NT$1.49 trillion ($46.36 billion), slightly above the expected NT$1.47 trillion, while its net income also exceeded expectations at NT$763.1 billion ($23.6 billion) against an anticipated NT$746.34 billion.
Financial performance
Sixth consecutive record net profit
TSMC has posted a record net profit for the sixth consecutive quarter, marking a 68.7% increase from the same period last year.
The company's operating margin for the third quarter stood at 58.7%, surpassing its own guidance range of 58%.
This highlights TSMC's strong market position and pricing power in light of the ongoing AI chip boom.
Market segmentation
Revenue breakdown by technology and platform
In terms of technology, 3-nanometer chips contributed the most to TSMC's third-quarter revenue at 33%, followed by 5-nanometer and 7-nanometer chips.
By platform, high-performance computing accounted for the largest share of revenue at 68%, with smartphones coming in second at 21%.
The company also announced a cash dividend of NT$7.00 per share for Q2.
Financial growth
Free cash flow surges; global expansion continues
TSMC's free cash flow surged to NT$476.56 billion in the third quarter, up from NT$139.38 billion a year ago.
The company has also been expanding its global manufacturing footprint to meet the rising demand for advanced semiconductors.
In July, TSMC announced plans to invest $265 billion in chip manufacturing facilities in Arizona and is reportedly considering a potential investment in Texas as well.