TSMC Reports 39% Revenue Surge in Q3 Amid AI Chip Demand

Taiwan Semiconductor Manufacturing Company (TSMC) has announced impressive third-quarter results, reflecting a surge in demand for advanced chip technologies, particularly those used in artificial intelligence (AI) applications. The semiconductor giant, which supplies key components to tech titans like Nvidia and Apple, posted revenue and earnings figures that exceeded market expectations.

Q3 Financial Highlights: For the third quarter of 2024, TSMC reported consolidated revenue of NT$759.69 billion (approximately $23.50 billion), marking a 39% increase compared to the same period last year. Sequentially, this represented a 12.8% growth from the previous quarter. In dollar terms, the year-over-year revenue growth was 36%, with a 12.9% increase compared to the second quarter of 2024.

The company’s revenue exceeded its own guidance range of $22.4 billion to $23.2 billion, as well as market forecasts which anticipated NT$748 billion in revenue, according to data provided by Bloomberg.

TSMC’s net income rose by 54.2% year-over-year to NT$325.26 billion, translating to earnings of NT$12.54 per share. This also surpassed analysts’ expectations, with Reuters data showing an estimated net profit of NT$300.2 billion.

Technology Breakdown: TSMC’s advanced chip technologies continue to be in high demand. The company reported that 3-nanometer (nm) technology accounted for 20% of its total revenue in Q3, while 5-nm and 7-nm technologies contributed 32% and 17% of total revenue, respectively. Together, these advanced technologies represented 69% of TSMC’s total wafer revenue, up from 67% in the second quarter.

Profit Margins: The company’s margins saw significant improvement in the third quarter compared to both the previous quarter and the same period last year. TSMC reported a gross margin of 57.8%, up from 53.2% in Q2 2024 and 54.3% in Q3 2023. Operating margin stood at 47.5%, an increase from 42.5% in the previous quarter and 41.7% in Q3 2023. Net profit margin also saw a notable increase, reaching 42.8%, compared to 36.8% in Q2 2024 and 38.6% in Q3 2023.

Stock Performance: The strong financial performance and increasing demand for AI chips have significantly boosted TSMC’s stock value. The company’s American Depositary Receipts (ADRs) listed on the New York Stock Exchange have surged by over 82% year-to-date. On Wednesday, the stock closed at $187.48, reflecting a 0.19% increase.

TSMC’s focus on advanced chip technologies, particularly in AI, has positioned the company for sustained growth as global demand for AI processors continues to rise. With solid financials and a leadership position in the semiconductor market, TSMC is expected to maintain its upward trajectory in the coming quarters.