Taiwan Semiconductor posts 69% profit rise, compares with Micron in AI chip race

Taiwan Semiconductor Manufacturing Company Limited (TSMC) reported its strongest quarter ever, with revenue of $46.72 billion and net profit rising 68.7%, according to insidermonkey.com. The company's gross margin reached 66.4% even as it began mass production on a new chip process, which typically pressures margins initially.

TSMC's stock price closed at $422.25 on October 15, returning 16.21% over six months, slightly outperforming major indices referenced by Insider Monkey. The company manufactures chips designed by major tech firms such as Nvidia, Apple, and Broadcom, making it a critical player in the semiconductor supply chain, the report noted.

In comparison, aol.com highlighted that Micron, another major chip manufacturer, is viewed as having more upside potential because the market treats it more like a cyclical commodity business. The article contrasted TSMC's foundry business as more stable and valued accordingly.

While companies like Nvidia and AMD receive much attention for their AI processors, the actual chip fabrication is dominated by foundry companies like TSMC and Micron, which are the two largest by market capitalization, aol.com explained.

TSMC's strong financial performance reflects robust customer demand and efficient factory operations, but its future depends on continued customer spending, which it cannot control, insidermonkey.com stated. Analysts see TSMC as one of the most promising technology stocks to buy now.

What we're watching: How TSMC and Micron navigate the evolving AI chip market and customer demand will be key to their future growth and valuation.