Taiwan Semiconductor Manufacturing Company (TSMC) is anticipating a 34% year-on-year revenue growth for the third quarter of 2024, projecting revenues to reach $23.1 billion, up from $17.3 billion in the previous year. Analysts have forecasted adjusted earnings per share (EPS) of $1.80, highlighting TSMC’s strong position within the rapidly growing artificial intelligence (AI) sector. As a major supplier of AI chips to leading tech companies like Nvidia and Apple, TSMC plays a crucial role in this expansion. The company's revenue guidance for the quarter ranges from $22.4 billion to $23.2 billion, closely aligning with market expectations.
TSMC’s growth is further bolstered by strategic investments aimed at expanding its manufacturing capacity beyond Taiwan. The company has committed over $65 billion to develop advanced semiconductor manufacturing plants in Arizona and the U.S. This initiative seeks to enhance TSMC’s production capabilities while reducing reliance on Taiwan, especially in light of global supply chain concerns. Additionally, TSMC is considering expanding its operations in Europe, indicating its commitment to addressing the rising global demand for AI chips and mitigating geopolitical risks in Asian markets like China.
Looking ahead, TSMC’s financial performance is expected to remain robust, with gross margins projected to exceed 54.5%. Analysts anticipate revenue growth exceeding 37% for the quarter, surpassing the company's midpoint projections. While there are concerns about potential overinvestment in AI infrastructure, TSMC’s leadership in AI chip production remains strong. Strategic partnerships with industry leaders like Nvidia and AMD, along with the anticipated supply of Nvidia's “Blackwell” chips, continue to strengthen TSMC’s dominant position in the global semiconductor market.