Ben Blanchard and Faith Hung
TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co, a dominant maker of advanced chips used in artificial intelligence applications, is expected on Thursday to report a 5% rise in first-quarter profit on strong demand.
The world’s largest contract chipmaker, whose customers include Apple (NASDAQ:) and Nvidia (NASDAQ:), has benefited from rapid advances in artificial intelligence that have helped it weather the pandemic-driven decline in electronics demand and pushed TSMC shares to a record high. high level. .
TSMC will report net profit of 217.2 billion tenge ($6.71 billion) for the quarter ended March 31, according to LSEG SmartEstimate, compiled from 22 analysts. SmartEstimates gives more weight to analyst forecasts that are more accurate.
For comparison: net profit for the first quarter amounted to 206.9 billion tenge last year.
Last week, TSMC reported first-quarter revenue growth of 16.5%, beating market expectations and exceeding the company’s own forecast.
Eric Yao, vice president of Taiwan-based Eastspring Investments, which manages about 90 billion Taiwanese shares in client assets, said $6.6 billion in U.S. subsidies for TSMC’s new plants in Arizona bode well for its prospects of maintaining its leadership in areas of advanced technological processes.
“TSMC will likely continue to lead on this front, and Intel (NASDAQ:) and Samsung (KS:) won’t have much chance of catching up,” he said, referring to two rivals looking to challenge the company’s dominance.
Intel this month reported widening operating losses in its foundry business, a blow to the chipmaker as it tries to recapture the technology leadership it lost in recent years to TSMC, which also announced last week it would build a third plant in Arizona.
Analysts at Fubon Securities said they expect TSMC to revise its AI demand forecast for future years.
“TSMC previously said that AI could account for the majority of its revenue by 2026, but based on our calculations, we believe this goal could be achieved earlier, in 2025.”
The artificial intelligence boom has helped lift the share price of Asia’s most valuable company, with Taipei-listed TSMC shares up 36% this year to an all-time high, compared with a 14% rise for the broader market.
TSMC is scheduled to hold a earnings conference call at 0600 GMT on Thursday.
($1 = NT$32.3890)