Taiwan Semiconductor Manufacturing Company just delivered its biggest profit surge in years, posting a staggering 39.1% jump in third-quarter earnings that crushed analyst expectations. The world's largest contract chipmaker rode the AI wave to NT$452.3 billion in net income, beating estimates by NT$35 billion as demand for advanced processors from Nvidia and Apple shows no signs of cooling.
Taiwan Semiconductor Manufacturing Company just proved that being the world's AI chip kingmaker pays off in spectacular fashion. The Taiwanese giant's third-quarter earnings released Thursday morning sent shockwaves through the semiconductor industry, with profits soaring 39.1% year-over-year to a record-breaking NT$452.3 billion.
The numbers tell the story of an industry in overdrive. Revenue climbed 30.3% to NT$989.92 billion, easily beating analyst estimates of NT$977.46 billion according to LSEG SmartEstimates. More telling is where that money's coming from - TSMC's high-performance computing division, which includes AI and 5G applications, drove the bulk of quarterly sales.
The AI angle can't be overstated here. As Asia's largest technology company by market capitalization, TSMC has essentially become the picks-and-shovels play for the entire artificial intelligence revolution. The company manufactures the cutting-edge processors that power everything from Nvidia's H100 data center chips to Apple's latest iPhone processors.
What's particularly striking is the technical sophistication driving these results. Advanced chips measuring 7 nanometers or smaller - the kind of bleeding-edge technology that enables AI workloads - now account for 74% of TSMC's total wafer revenue. That's a massive shift toward the most profitable, technically demanding end of the semiconductor spectrum.
The timing couldn't be better for TSMC's positioning. While competitors scramble to catch up on advanced manufacturing processes, the Taiwanese company has locked in long-term relationships with the biggest names in AI. Nvidia relies almost exclusively on TSMC for its GPU manufacturing, while Apple continues pushing the envelope on mobile AI capabilities with TSMC-manufactured chips.
But this isn't just about riding a wave - it's about capacity constraints creating a seller's market. Industry sources suggest TSMC's most advanced manufacturing nodes are booked solid through 2026, with customers paying premium pricing for guaranteed allocation. The company's ability to consistently deliver on the most complex chip designs has created an almost monopolistic position in certain segments.
