TAIPEI (AFP) -- Taiwanese chip giant TSMC said Thursday that net profit soared to another record high in the third quarter, buoyed by massive global demand for AI hardware.
The result marked the sixth straight record quarterly net profit for the company, the world's biggest contract maker of microchips, including those used in Nvidia AI data center processors.
But with the AI boom only growing, analysts warned that chipmakers and other tech firms reporting bumper financial results risk being "judged against perfection" by investors.
Meanwhile, the company's planned expansion into the United States, including building chip plants in Arizona, is also likely to shape its future earnings.
TSMC's net profit for July-September surged 68.7 percent year-on-year to NT$763.1 billion ($23.6 billion), beating analyst estimates of NT$739.5 billion.
The result surpassed the company's previous quarterly record of NT$706.6 billion set in the previous three months.
Quarterly revenue rose 50.9 percent to NT$1.5 trillion.
Demand for TSMC's advanced chips remains "extremely robust," including the steep ramp-up of 2nm technology, TSMC chief executive C.C. Wei said during an earnings call.
The chipmaker is trying to "do everything we can, whenever we can, as fast as we can" to meet that strong customer demand, he said.
"We have no intention to leave food on the table for others, and we want to capture every piece of business possible." Nevertheless, he said the company would be "prudent" in its business planning for 2027 owing to rising component prices and economic uncertainties.
Speaking on the firm's US investment plans, he said it was exploring sites "outside Arizona" for potential expansion and had sent an evaluation team to Texas.
"We work very hard to expand our capacity in the US," he said, but stopped short of providing details, noting the plans were still under discussion.
Governments and tech giants are pouring eye-watering sums into building data centers that can train and run AI tools such as image generators and agents that can execute tasks.
But concerns about overstretched valuations have fuelled fears of a market bubble, along with questions over when the massive investments into the sector will reap returns.
TSMC's share price has ballooned nearly 60 percent this year, adding pressure on its earnings announcement as investors ask how long the good times can last.
The firm builds chips for the likes of Nvidia, Apple, AMD and Broadcom -- meaning it "sits at the very center of the AI ecosystem," Zavier Wong, a market analyst at eToro, told AFP ahead of the earnings announcement.
"Every leading AI chip still runs through its factories, so for investors, this week's results are about as close as it gets to a health check on the entire AI build-out." Fears over AI's dangers have intensified in recent weeks, leading to calls for leading US labs to deliberately slow down their technological advancement.
"If the biggest buyers start to pace their spending, whether because of funding costs or AI labs slowing the development of new models, chipmakers would feel it quickly," Wong said.
TSMC is not the only chip giant enjoying the benefits of the AI boom.
South Korea's Samsung Electronics last week forecast a more than 780 percent year-on-year leap in third-quarter operating profit but its shares still fell because the estimate missed expectations.
"Record profits have become the new normal, and Nvidia has lived with this for years, judged against perfection," Wong said.
Often "investors skip straight past the headline numbers and pick through the guidance and the fine print for any warning signs."
