TSMC's Q3 net profit hits new quarterly high

Taipei, Oct. 15 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday reported a new quarterly high in net profit in the third quarter, on the back of strong global demand for AI applications, while its gross margin fell from a quarter earlier due to an increase in shipments of chips made using the company's advanced 2 nanometer process.

In a statement released before an investor conference began, the world's largest contract chipmaker said it posted NT$763.06 billion (US$23.62 billion) in net profit in the July-September period, up 68.7 percent from a year earlier and up 8.0 percent from a quarter earlier.

TSMC said its earnings per share for the third quarter stood at a new high of NT$29.43, compared with NT$17.44 a year earlier and NT$27.25 a quarter earlier.

Amid solid demand for high performance computing devices, smartphones, the Internet of Things and automotive electronics in the third quarter, TSMC said, its consolidated sales also smashed previous records to reach US$46.72 billion, up 41.2 percent from a year earlier and up 16.2 percent from the quarter earlier. In addition, third quarter sales beat the company's previous estimate of US$44.6 billion to US$45.8 billion.

The chipmaker used an exchange rate of NT$32 to make the third-quarter sales forecasts. In Taiwan dollar terms, third quarter consolidated sales totaled NT$1.49 trillion, also beating the estimate of NT$1.427 trillion to NT$1.466 trillion, according to TSMC.

Due to an increase in chips made using the 2nm process, the latest technology for which the company began commercial production, the gross margin -- the difference between revenue and cost of goods sold -- stood at 66.4 percent in the third quarter, up 6.9 percentage points from 59.5 percent a year earlier but down 1.3 percentage points from 67.7 percent a quarter earlier.

However, the third quarter gross margin still came within the company's prediction of 65.0-67.0 percent, according to TSMC.

TSMC said chips using the 2nm process accounted for 8 percent of its total sales in the third quarter, up from 3 percent in the second quarter, while chips using the 3nm process, the 5nm process and the 7nm process made up 33 percent, 28 percent and 10 percent, respectively, of total revenue in the third quarter.

In other words, these four advanced technologies accounted for 79 percent of total sales in the third quarter, up from 77 percent in the second quarter.

TSMC posted NT$2.42 trillion in net profit in the first nine months of this year, up 68.5 percent from a year earlier with EPS at NT$78.75 as its consolidated sales totaled about NT$3.90 trillion, up 41.1 percent from a year earlier.

The nine-month gross margin stood at 66.8 percent, up 7.8 percentage points from a year earlier.