TSMC's Q2 Profits Soar Amid AI-Driven Chip Demand

TSMC reported a 36% rise in second-quarter net profits, surpassing market expectations. The surge is driven by increased demand for semiconductors used in AI applications. TSMC's revenue also grew significantly, countering a decline in pandemic-related electronics demand. However, its shares dipped following comments by U.S. presidential candidate Donald Trump.

TSMC posted a 36% jump in second-quarter net profit on Thursday, exceeding market expectations as the Taiwanese chipmaker thrives on surging demand for AI-related semiconductors.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chipmaker and a significant supplier for Apple Inc and Nvidia, has capitalized on the rapid adoption of AI to offset the slowdown in pandemic-driven electronics demand. TSMC's net profit for April-June soared to T$247.8 billion ($7.60 billion) from T$181.8 billion year-over-year.

The profit outperformed a T$238.8 billion prediction for the quarter ending June 30, based on an LSEG SmartEstimate gathered from 21 analysts. These estimates prioritize forecasts from the most consistently accurate analysts. TSMC, Asia's most valuable publicly traded firm, announced a second-quarter revenue increase of 33% to $20.8 billion, surpassing its earlier forecast range of $19.6 billion to $20.4 billion. Last week, the company reported second-quarter revenue in Taiwan dollars at T$673.51 billion.

Capital expenditures for the second quarter were reported at $6.36 billion, compared to $5.77 billion in the previous quarter. However, TSMC's Taipei-listed shares fell 2.4% on Thursday, impacted by U.S. presidential candidate Donald Trump's remarks that Taiwan has taken "about 100% of our chip business" and should pay the U.S. for its defense.

($1 = 32.6000 Taiwan dollars)

(With inputs from agencies.)