Updated Version 4 - After TSMC Sets Profit Records for Six Consecutive Quarters, It Takes a "Cautious" Stance Toward 2027

Restructured based on details from the earnings call

Wen-Yee Lee/Ben Blanchard

Reuters Taipei, October 15 - As the world's largest advanced chipmaker, TSMC signaled caution for 2027 on Thursday due to macroeconomic uncertainty, which somewhat tempered optimism following a record sixth consecutive quarter of profit driven by strong AI demand.

Although TSMC 2330.TW stated that demand is “extremely strong” and has not seen signs of its so-called AI “supercycle” slowing, the company remains cautious in its business planning.

“Looking ahead, we continue to observe challenges in consumer and price-sensitive end markets due to component price increases and macroeconomic uncertainty,” CEO C.C. Wei said on the earnings call. “Therefore, we will remain cautious when planning our business for 2027.”

TSMC reported its financial results amid market concerns that the AI investment boom is losing momentum. On Wednesday, ASML (link) ASML.AS, the world’s largest AI chip and advanced semiconductor equipment manufacturer, offered an optimistic outlook.

As a key supplier to Nvidia NVDA.O and Apple AAPL.O, TSMC said it expects Q4 revenue to grow as much as 61% year-over-year to a range of $52.3 billion to $54.3 billion. The company maintained its 2026 capital spending forecast at $60 billion to $64 billion.

Prior to the earnings release, TSMC's Taipei-listed shares closed down 2%, in line with the general sell-off in tech stocks (link), as markets worried that further Fed rate hikes could hurt the borrowing-cost-sensitive AI sector.

Korean rivals Samsung Electronics 005930.KS and SK Hynix 000660.KS both fell more than 10%.

Analysts said demand remains strong for TSMC’s AI chip manufacturing capacity and its advanced chip packaging technology CoWoS.

This has propelled the most valuable company in Asia to new heights, with a market value of around $2 trillion, nearly twice that of Samsung Electronics.

TSMC reported net profit for the July-September quarter of TWD 763.1 billion ($23.59 billion), up 69% from a year earlier, beating the LSEG SmartEstimate of TWD 746.3 billion based on 16 analyst forecasts.

This performance marks not only TSMC’s highest-ever quarterly net profit but also its 11th straight quarter of profit growth.

Last week, the company reported Q3 revenue up 50% year-over-year (link), exceeding market expectations and setting a new record.

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TSMC is investing $265 billion to build chip plants in Arizona, including an additional $100 billion in investments announced in July.

In September, Reuters reported that TSMC is evaluating (link) potential investment in Texas. Tesla CEO Elon Musk also stated last week that his company would build and operate the Terafab AI chip campus, potentially leasing part of it to TSMC.

ASML (link) ASML.AS said Wednesday that customers have started placing orders for 2029 and 2030, easing concerns over the waning AI investment frenzy.

TSMC shares on the Taipei Exchange have risen 57% year-to-date, in line with the Taiwan benchmark's 62% gain.

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(1 USD = TWD 32.3450)

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