TSMC Q3 profit expected to set record on AI spending boom

TAIPEI (Reuters) -TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is set to post a 28% jump in third-quarter profit to reach a record high due to surging demand for AI infrastructure, though U.S. tariffs may complicate its outlook. Taiwan Semiconductor Manufacturing Co, the world's biggest contract chipmaker and a key supplier to Nvidia and Apple, is likely to report a net profit of T$415.4 billion ($13.59 billion) for the three months through September 30, showed an LSEG SmartEstimate compiled from 20 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC has already flagged a market-forecast-beating rise in third-quarter revenue of 30%. Any profit result above T$398.3 billion would be the chipmaker's highest-ever and its seventh consecutive quarter of profit growth. TSMC, Asia's most-valuable listed company with a market capitalisation of around $1.2 trillion – nearly three times that of South Korean rival Samsung Electronics – will report financial results on Thursday and provide fourth-quarter guidance in an earnings call scheduled for 0600 GMT. On Wednesday, top semiconductor equipment maker ASML, for whom TSMC is a major customer, said third-quarter bookings beat market forecasts but that it expected a significant fall in demand from China next year. Samsung on Tuesday said it expected its biggest quarterly profit in over three years, also on the AI boom. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are currently subject to a 20% tariff, but that excludes chips. U.S. Secretary of Commerce Howard Lutnick proposed last month that Taiwanese companies split their production of chips 50-50 between Taiwan and the U.S., compared to the current setup where the vast majority of production is on the island.  Taiwan has rejected that idea. TSMC is already investing $165 billion building factories in the U.S. in the state of Arizona. Shares in TSMC have gained 36% so far this year on optimism over AI, largely brushing off tariff concerns. The heavyweight's rise has powered the benchmark Taiwanese index's 18% advance over the same period. ($1 = 30.5680 Taiwan dollars) (Reporting by Ben Blanchard; Editing by Christopher Cushing)

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