TSMC logs huge profit jump and predicts record Q2 revenue on AI boom

By Wen-Yee Lee, Faith Hung and Ben Blanchard

TAIPEI, April 16 (Reuters) – TSMC posted a hefty jump to record profit and forecast second-quarter sales would ‌hit a historic high as the world’s biggest contract manufacturer of advanced AI ‌chips scrambles to meet relentless hunger for its products.

The company, a major supplier to Nvidia, noted the ​world was in the midst of an “AI megatrend”, adding its capital spending this year would be at the high end of earlier guidance – remarks likely to ease investor concerns about the impact of the Iran war on AI chip demand.

Taiwan Semiconductor Manufacturing Co’s net profit ‌for January-March surged 58% to ⁠T$572.5 billion ($18.2 billion), comfortably beating expectations and marking its eighth straight quarter of double-digit growth.

For the current quarter, it forecast sales between $39 ⁠billion and $40.2 billion. That compares with $30.1 billion in the same period last year and $35.9 billion in the first quarter.

“AI demand is extremely robust,” CEO C.C. Wei said at an analysts call ​on ​the results.

First-quarter results showed that revenue from advanced ​3-nanometre chips now accounts for a ‌quarter of the company’s sales, up sharply from just 6% in the third quarter of 2023.

The insatiable demand for high-performance chips required for AI workloads has driven Asia’s most valuable company to new heights.

Ahead of the earnings results, TSMC shares closed up 0.2% at a record of T$2,085. Its market capitalisation is now nearly double that of ‌South Korean rival Samsung Electronics at around $1.7 trillion.

The ​war in the Middle East threatens to disrupt ​the supply of production materials for ​semiconductors such as helium and hydrogen, but TSMC said it had ‌safety stock on hand.

TSMC is investing $165 billion ​to build chip factories ​in the U.S. state of Arizona.

The company has also revised its plans in Japan and is now set to manufacture 3-nanometre chips there, instead of focusing ​on more mature nodes.

TSMC’s ‌Taipei-listed shares have gained 35% so far this year, outperforming the 28% rise ​for the broader market.

($1 = 31.5180 Taiwan dollars)

(Reporting by Wen-Yee Lee, Faith Hung ​and Ben Blanchard; Editing by Edwina Gibbs)