TSMC First-Quarter Profit Expected to Rise 5% on Strong AI Chip Demand
13:57 JST, April 16, 2024
TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co 2330.TW, TSM.N, the dominant producer of advanced chips used in artificial intelligence applications, is expected to report a 5% rise in first-quarter profit on Thursday thanks to strong demand.
The world’s largest contract chipmaker, whose customers include Apple AAPL.O and Nvidia NVDA.O, has benefited from a surge towards AI that has helped it weather the tapering off of pandemic-led electronics demand and pushed TSMC’s stock to a record high.
TSMC is set to report a net profit of T$217.2 billion ($6.71 billion) for the quarter ended March 31, according to an LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.
That compares to the first-quarter net profit of T$206.9 billion last year.
TSMC last week reported a 16.5% rise in first-quarter revenue, beating market expectations and at the high end of the company’s own guidance.
Eric Yao, a vice president at Taiwan’s Eastspring Investments, which manages about T$90 billion of client assets in Taiwanese stocks, said the $6.6 billion in U.S. subsidies for TSMC’s new Arizona plants augured well for its prospects of maintaining its lead in advanced process technologies.
“TSMC will likely continue to lead in that front, and Intel INTC.O and Samsung 005930.KS will not have much chance to catch up,” he said, referring to two rivals who want to challenge the company’s dominance.
Intel this month disclosed deepening operating losses for its foundry business, a blow to the chipmaker as it tries to regain a technology lead it lost in recent years to TSMC, which also announced last week it would build a third fab in Arizona.
Fubon Securities analysts said they expected TSMC to revise up its outlook for AI demand for future years.
“TSMC previously indicated that AI could account for high-teens of its revenue by 2026, but based on our calculation, we think the target could be reached earlier in 2025.”
The AI boom has helped drive up the price of shares in Asia’s most valuable company, with TSMC’s Taipei-listed stock having surged 36% so far this year to a historic high, compared with a 14% gain for the broader market .TWII.
TSMC is due to hold an earnings call at 0600 GMT on Thursday.
$1 = 32.3890 Taiwan dollars
"News Services" POPULAR ARTICLE
-
Dollar Edges Lower, Yen at 34-year Trough
-
A Strong Earthquake Shakes Taiwan, Damaging Buildings and Causing a Tsunami
-
Taiwan’s Strongest Earthquake in 25 Years Kills Seven, Traps 77 (UPDATE 2)
-
Japan’s Nikkei Climbs 1.5% as Investors Scoop Up Beaten-Down Stocks (Update 1)
-
Japan Visitors Exceed 3 Mln in March, a Monthly Record, Tourism Agency Says
JN ACCESS RANKING
- M6.0 Earthquake Hits Japan’s Tohoku Region; Fukushima, Iwate, Miyagi Prefectures Observe 4 on Japanese Scale With No Risk of Tsunami
- China Mutes Memorialization of Reformer Hu Yaobang; Memories Could Spark Critique of Xi Administration
- Shinkansen Services Suspended After Man ‘Searches for Phone’ on Tracks; Disruption Affects About 14,000 Passengers
- U.S. 7th Fleet officer Arrested on Suspicion of Stealing Sushi, Sashimi, Chicken at Kanagawa Shopping Mall; Suspect Caught Mid-Meal
- UNRWA Director Describes Catastrophic Destruction in Gaza; Says Relief Trucks Robbed, ‘People’s Hearts Destroyed’