Taiwan Semiconductor Shares Soar on Strong Q3 Results and AI Boom

By Zoey Ramirez Oct 23, 2024

Shares of Taiwan Semiconductor soar after a solid Q3, boosted by AI and strong smartphone demand.

Shares of U.S.-listed Taiwan Semiconductor Manufacturing Co. (TSMC) climbed 9% on Thursday after it announced strong quarterly earnings, and predicted a favourable future fueled by the artificial intelligence (AI) surge. TSMC, a supplier to giant tech firms such as Apple and Nvidia, saw a 54% annual rise in third-quarter net income of 325.26 billion New Taiwan dollars (equivalent of $10.12 billion), a significant increase from the previous NT$211 billion. The company's profit exceeded the forecasted NT$300.78 billion provided by analysts from Visible Alpha, making it a massive win for the world's largest contractchip manufacturer.

A 39% boost in revenue to NT$759.69 billion ($23.64 billion) for the quarter and a 57.8% gross margin was also reported by TSMC. These numbers surpassed analysts' predictions and the guidance provided in the second quarter. "In the third quarter, our business was elevated by solid smartphone and AI-related demand for our industry-topping 3nm and 5nm technologies," mentioned TSMC's CFO, Wendell Huang. Also, he anticipated that the fourth quarter of 2024 would continue to see a high demand for their leading-edge process technologies.

Investor confidence in the AI boom was revitalized on Thursday, given TSMC's positive earnings report, contrasted with ASML Holding's gloomier forecast earlier in the week. Shares of AI chip titans Nvidia, Arm Holdings, and Advanced Micro Devices also saw an upward trend.

The CEO of TSMC, C.C. Wei confirmed the substantial demand for AI during the earnings call, asserting that it was "real." TSMC American depositary receipts (ADRs) have nearly doubled in value over the course of this year.

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