Taiwan Semiconductor Manufacturing Co. reported a record third-quarter profit that exceeded analyst estimates, driven by sustained global demand for artificial intelligence chips. The company, the world's largest contract chipmaker, saw its net profit rise 68.7% from the same period last year, marking the sixth consecutive quarter of record earnings.
TSMC's operating margin for the quarter reached 58.7%, surpassing the upper limit of its 58% guidance range. This performance highlights the pricing power the company maintains as the AI boom fuels semiconductor demand.
Revenue was led by high-performance computing, which accounted for 68% of sales, followed by smartphones at 21%. Automotive was the fastest-growing segment quarter-on-quarter, with a 23% increase. In terms of technology, 3-nanometer chips represented the largest share of revenue at 33%, ahead of 5-nanometer and 7-nanometer chips.
Free cash flow surged to NT$476.56 billion in the third quarter, up from NT$139.38 billion a year earlier. The board approved a NT$7.00 cash dividend for the second quarter.
During its July earnings announcement, TSMC detailed intentions to broaden its production capacity in the United States, citing a planned $265 billion commitment to its Arizona facilities. The chipmaker is also reportedly weighing a potential investment in Texas to further solidify its American manufacturing base.