U.S.-listed shares of TSMC rise 9% in premarket after quarterly profit soars on AI demand

Taiwan Semiconductor Manufacturing Company on Thursday reported a 54% hike in net profit in the third quarter and forecast annual revenue growth in the last three months of the year, as global chipmakers continue to benefit from demand boosted by AI applications.

The company's net income was 325.3 billion Taiwanese dollars ($10.1 billion) over the July-September quarter, surpassing an LSEG estimate of $300.2 billion Taiwanese dollars cited by Reuters.

U.S.-listed shares were up 9% at 9:09 a.m. ET in premarket trading.

TSMC is the world's largest producer of advanced chips, serving clients such as Apple and Nvidia.

Net revenue came in at $23.5 billion in the third quarter, up 36% year-on-year, with TSMC's gross margin rising to 57.8% over July-September, compared with 54.3% in the same period of last year.

"Based on the current business outlook, we expect for our fourth-quarter revenue to be between $26.1 billion and $26.9 billion, which represents a 13% sequential increase or a 35% year-over-year increase at the midpoint," TSMC Chief Financial Officer Wendell Huang said during an earnings call following the results release, according to a call transcript produced by FactSet.

In the third quarter, "our business was supported by strong smartphone and AI-related demand for our industry leading 3nm and 5nm technologies," TSMC said in a statement, referencing its semiconductor nodes.

In the Thursday earnings call, TSMC Chairman and CEO C.C. Wei stressed that AI demand is "real" and that the company has experienced the "deepest and widest growth of anyone in this industry," as a result.

"We have talked to our customers all the time, including our hyperscaler customers who are building their own chips. And almost every AI innovator is