TSMC announced strong third-quarter earnings, with revenue exceeding guidance due to strong smartphone and AI-related demand for its 3-nanometer and 5-nanometer technologies. The company's gross margin increased to 57.8%, driven by higher capacity utilization and cost improvements. TSMC expects continued strong demand for its leading-edge technologies in the fourth quarter, forecasting revenue between $26.1 billion and $26.9 billion. While the company does not have a specific 2025 CapEx number yet, it anticipates a higher figure than 2024 due to the healthy growth outlook and ongoing investment in advanced technologies like 2-nanometer and A16. TSMC's CEO expressed confidence in the sustainability of AI demand, citing its real-world applications and tangible ROI benefits observed within TSMC's own operations. The company is actively increasing CoWoS capacity to meet customer demand, which currently exceeds supply. TSMC is also addressing power challenges associated with Taiwan's energy landscape by working closely with the government to secure the necessary electricity, water, and land resources for its expansion plans.
