TSMC’s Q3 earnings topped forecasts
Nvidia’s H20 AI accelerator chip is made by TSMC. Image credit-Nvidia
The company, whose shares trade on the New York Stock Exchange under the symbol TSM, dropped $4.87 or 1.60% to $299.84 on Thursday. Analysts at Morningstar wrote that the foundry is so busy with its A-list clients, AI, and its new 2nm process node, tariffs on devices heading to the U.S. will not impact TSMC’s results. In a note written this month, Morningstar said, “Demand for TSMC’s products is unyielding. Given TSMC’s dominance, we doubt the company would be hindered if it faced tariffs on shipments to U.S. customers. We expect AI demand to stay resilient.”
Recent deals by three TSMC clients will flood the foundry with revenue and profits for the immediate future
Counting on that demand for AI chips to stay heavy, TSMC hiked its forecast for its 2025 revenue growth and now expects its top line to grow in the mid 30% range in U.S. dollars for the current year. The company said that it still expects capital spending to be as high as $42 billion this year.
There is no question that TSMC’s financial strength is, at the moment, tied to AI. Huge datacenter deals between OpenAI and chip designers like Nvidia, AMD, and Broadcom are based on those three firms producing huge amounts of chips. All three are TSMC customers so these transactions will greatly benefit TSMC in the years ahead.
The foundry’s CEO C.C. Wei stated, “AI demand actually continues to be very strong – more strong than we thought three months ago. We are also happy to see a continuous strong outlook from our customers. In addition, we directly receive very strong signals from our customers requesting the capacity to support their business. Thus, our conviction in the AI megatrend is strengthening. Wei is confident that even if U.S. sanctions prevent TSMC from doing business in China, AI business will still grow strongly.
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