Taiwan Semiconductor Manufacturing Co. posted its sixth consecutive quarter of record profits, fueled by high demand for AI-related semiconductors.

Taiwan Semiconductor Manufacturing Co. (TSMC) reported a record third-quarter profit on Thursday, surpassing market estimates. The world's largest contract chipmaker saw a 68.7% increase in net profit compared to the previous year, driven by sustained global demand for artificial intelligence chips.

Financial Performance and Margins

TSMC achieved an operating margin of 58.7% for the third quarter, exceeding its own guidance range of 58%. The company reported revenue of 1.49 trillion New Taiwan dollars, or approximately $46.36 billion. Additionally, free cash flow rose significantly to NT$476.56 billion, compared to NT$139.38 billion during the same period last year.

Revenue by Technology and Platform

High-performance computing remained the company's primary revenue driver, accounting for 68% of total revenue, while smartphones followed at 21%. In terms of manufacturing technology, 3-nanometer chips represented the largest share of revenue at 33%. The automotive segment emerged as the fastest-growing area on a quarter-on-quarter basis, recording a 23% growth rate.

Dividends and U.S. Expansion Plans

The TSMC board approved a cash dividend of NT$7.00 per share for the second quarter. Regarding its U.S. operations, the company previously announced plans for a $265 billion investment in Arizona. Reports indicate the firm is also evaluating a potential expansion into Texas to further bolster its American manufacturing footprint.