TSMC's Q3 revenue increased by 50% year-on-year.
TSMC's third-quarter revenue increased by 50% year-on-year to a new high, reflecting continued strong demand for artificial intelligence chips and better-than-expected performance.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, reported record third-quarter revenue as demand for artificial intelligence (AI) applications continued to grow. The results exceeded market expectations, underscoring the importance of AI chip demand as a key growth driver for the semiconductor industry.

TSMC said on Oct. 8 that third-quarter revenue came to about NT$1.49 trillion, or approximately US$46.71 billion, up 50% from a year earlier. Reuters calculated that revenue in the same period last year was about NT$989.92 billion.

According to Reuters, the LSEG SmartEstimate, based on forecasts from 19 analysts, had put third-quarter revenue at NT$1.46 trillion, below TSMC's actual figure. At its July earnings briefing, TSMC had forecast third-quarter revenue of between US$44.6 billion and US$45.8 billion.

September revenue rises 54.6% year on year

TSMC's revenue for September alone reached NT$511.86 billion, up 54.6% year on year. The figure was consistent with the quarterly performance, reflecting continued order support from demand for AI-related applications.

TSMC is a key chip supplier to major technology companies including Nvidia and Apple. As AI computing, data centers and related technologies continue to develop, demand for advanced chips has become a major focus for the market.

However, monthly and quarterly revenue primarily reflect sales volume and do not directly indicate profitability. Investors will need to wait for the full earnings report for further details on gross margin, operating profit and capital expenditure.

Investors turn to Oct. 15 earnings report and outlook

TSMC is scheduled to release its full third-quarter earnings report on Oct. 15, along with updated guidance for the current quarter and the full year. Investors will be watching for the company's latest comments on AI chip demand, capacity planning and future revenue growth.

Based on the LSEG SmartEstimate, analysts expect TSMC's third-quarter net profit to rise 64% year on year to NT$740.8 billion. This is a market forecast, not a profit figure officially released by TSMC.

TSMC is also one of Asia's most valuable listed companies. Reuters reported that its market capitalization stood at about US$2.1 trillion as of the time of publication.

Strong revenue fails to shield shares from market sentiment

Despite beating revenue expectations, TSMC's shares listed in Taiwan closed 1.35% lower on Oct. 8, while the broader Taiwan stock market fell about 1% on the day.

The performance highlights that corporate revenue and short-term share-price movements do not always move in tandem. In addition to AI demand, investors will assess broader market trends, valuation levels and the company's future outlook.

TSMC's record third-quarter revenue provides an important demand signal for the semiconductor industry. However, whether AI demand can continue to translate into profit growth, and how the company's operating momentum will develop in the coming quarters, will require confirmation from the full earnings report and subsequent guidance.