Taiwan's TSMC, the world's largest contract chipmaker (foundry), has once again broken its all-time record for net profit in the third quarter of this year, driven by the artificial intelligence (AI) boom.

According to Reuters and AFP on the 15th (local time), TSMC announced that its net profit for the third quarter rose 68.7% from the same period last year to 763.1 billion New Taiwan dollars (approx. 31.7 trillion won), setting a new net profit record for the sixth consecutive quarter.

This is an 8% increase from the second-quarter net profit and exceeds the market consensus of 746.3 billion New Taiwan dollars (approx. 31 trillion won) estimated by London Stock Exchange Group (LSEG).

The gross margin stood at 66.4%, affected by an increase in shipments of advanced 2-nanometer (nm) process products.

While this is up 6.9 percentage points from the same period last year, it is down 1.3 percentage points from the previous quarter, in line with expectations.

The proportion of products using the 2nm process in total revenue increased from 3% in the second quarter to around 8% in the third quarter.

When combined with the 3nm (33%), 5nm (28%), and 7nm (10%) processes, the proportion of advanced processes of 7nm or below in total revenue reached 79%, higher than the second quarter (77%).

Previously, TSMC announced on the 8th that its third-quarter revenue reached a record high of 1,494.243 billion New Taiwan dollars (approx. 62.2 trillion won), up 50.9% from the same period last year.

For the fourth-quarter revenue outlook, TSMC projected between $52.3 billion and $54.3 billion (approx. 70.3 trillion to 73 trillion won), which is up to 61% higher than the same period last year.

TSMC Chairman C.C. Wei stated that demand for advanced chips is very strong, saying, "We are trying to do everything we can, whenever we can, and as fast as we can. We have no intention of leaving food on the table for competitors. We want to capture every possible business opportunity."

At the same time, however, he noted, "We are being cautious about our business plans for next year," citing rising component costs and macroeconomic uncertainties.

Regarding TSMC's investments in the U.S., he explained that the company is looking into sites beyond Arizona to expand plants and that it has dispatched employees to Texas to evaluate potential locations.

"We are working very hard to expand our production capacity in the U.S.," he said, while withholding specific details as discussions are ongoing.

Regarding the possibility of TSMC participating in Tesla CEO Elon Musk's semiconductor factory project 'TeraFab', he said, "It is still in the discussion stage," adding that "TSMC will operate it" rather than simply leasing production capacity.

TSMC maintained its capital expenditure outlook for this year at $60 billion to $64 billion (approx. 80.7 trillion to 86 trillion won), while Bloomberg reported that the market is raising its consensus for next year's capital expenditures.

The average capital expenditure forecast for next year compiled by Bloomberg is $75 billion (approx. 100.8 trillion won), while Goldman Sachs and UBS Group expect $85 billion (approx. 114.3 trillion won) and $90 billion (approx. 121 trillion won), respectively.

(Photo: Yonhap News)