TSMC Sees 30% Revenue Rise in Third Quarter Amid AI Boom

The world’s largest contract chipmaker, TSMC, continues to benefit from the boom in artificial intelligence (AI).

On Thursday, TSMC – Taiwan Semiconductor Manufacturing Company – reported third-quarter revenue rose 30% year-on-year, which beat its market forecast, and is based on soaring demand for the company’s chips because of the surge in interest in AI applications.

Revenue for the July to September period came in at T$989.92 billion ($32.47 billion), according to Reuters calculations. That is well up on its T$759.69 billion earnings in the same period a year ago.

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The latest result handily topped an LSEG SmartEstimate of T$973.26 billion drawn from 22 analysts, and was in the mid-point of guidance of $31.8 billion to $33 billion issued by TSMC in July in its last earnings call (TSMC only gives guidance in US dollars).

This news comes as no surprise, given recent reports that investment in AI data centres has been credited with keeping the US economy afloat.

Harvard economist Jason Furman said in a September 27 post on X.com that US GDP growth would have been just 0.1% on an annualised basis without the dramatic increase in high-tech infrastructure such as AI data centres.

Analysts said that stems partly from other policies, such as the Trump Administration’s dramatic imposition of a raft of tariffs on imports to the United States, which look to have had negative impacts on the US economy so far.

Renaissance Macro Research estimated in August that the dollar value contributed to GDP growth by the AI data-centre buildout had topped US consumer spending for the first time ever, according to a report by Fortune, which said that was “remarkable” given consumer spending is usually about two-thirds of US GDP.

OpenAI expanding across Asia

And the AI boom looks likely to continue as the US-based artificial intelligence company OpenAI and ChatGPT, its conversational AI programme, continues to offer its service across the world.

On Thursday, the US tech giant said it had expanded its lower-cost subscription plan, ChatGPT Go, which was launched in India and Indonesia earlier this year, to 16 more countries across Asia.

That means OpenAI’s latest rollout will offer its cheapest plan to users in 18 countries in Asia.

They are: Afghanistan, Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Maldives, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Thailand, Timor-Leste (East Timor) and Vietnam.

Shares up 34% this year

Meanwhile, TSMC will report full third-quarter earnings on October 16, including an updated outlook for the current quarter and full year.

The company, whose customers include Nvidia and Apple, has been a major beneficiary of advances in AI, which has more than offset the tapering off of pandemic-led demand for chips used in consumer electronics like tablets.

TSMC’s Taipei-listed shares have gained 34% so far this year, compared with an 18.5% rise for the broader market.

Taiwan’s Foxconn, the world’s largest contract electronics maker and Nvidia’s biggest server maker, has also reported bumper sales, logging its highest-ever revenue for the third quarter.