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Taiwan's TSMC posts sharp rise in third quarter net profit
The United States and some European countries have blocked exports of high-tech chip technology to China over fears of military use.
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The logo of Taiwan Semiconductor Manufacturing Co (TSMC) is pictured at its headquarters, in Hsinchu, Taiwan, on Jan. 19, 2021. (Reuters/Ann Wang)
T
aiwanese chip giant TSMC announced Thursday a bigger-than-expected increase in net profit for the third quarter of 2024, buoyed by strong demand for smartphones and AI technology.
Taiwan Semiconductor Manufacturing Company controls more than half the world's output of chips used in everything from Apple's iPhones to Nvidia's cutting-edge artificial intelligence hardware.
Tech stocks took a hit this week as Dutch tech giant ASML, which supplies chip-making machines to the semiconductor industry, unveiled a cut to its 2025 guidance and a disappointing slump in sales bookings.
Fuelling the falls were reports that US President Joe Biden's administration was considering a cap on exports of advanced AI chips to some countries.
TSMC -- which is listed in Taipei and New York -- said net profit in the three months to September hit NT$325.26 billion (US$10.1 billion), up 54.2 percent from the same period last year.
Revenues in the period grew 36 percent on-year to US$23.5 billion, the firm said in a statement.
"In the third quarter, revenue increased 12.8 percent quarter over-quarter, as our business was supported by strong smartphone and AI-related demand for our industry leading 3nm and 5nm technologies," the company said in a statement.
Taiwan's largest company raised its outlook for 2024 revenue in July, underscoring expectations for sustained spending on AI infrastructure from the likes of Microsoft and Amazon.
TSMC is at the forefront of a generative AI revolution, churning out the world's most advanced microchips needed to power products made by Silicon Valley.
But it is grappling with geopolitical tensions between the United States and China over technology import restrictions, trade and Taiwan.
Its headquarters -- and the bulk of its fabrication plants -- are in Taiwan, a self-ruled island that China claims as part of its territory.
China held a day of large-scale war games around Taiwan on Monday that included a blockade exercise that experts have warned would be devastating for the island's economy.
The United States and some European countries have blocked exports of high-tech chip technology to China over fears of military use.
The semiconductor supply chain is highly vulnerable to shocks, and concerned governments have lobbied TSMC to move more production away from Taiwan.
TSMC's new factories overseas include three planned in the United States, while one opened in Japan this year.
In August, the company broke ground on its first European factory in the eastern German city of Dresden and reportedly is planning more plants in Europe with a focus on AI chips.
