Some European, U.S. chip stocks gain after TSMC posts third-quarter income spike

Investing.com - Some European and U.S. chip equipment stocks ticked up on Thursday after Taiwan Semiconductor Manufacturing Co. clocked a record third-quarter profit, powered by soaring demand for artificial intelligence infrastructure.

ASML, ASM International, BE Semiconductor were all higher by 04:14 ET (08:14 GMT). In the United States, TSMC suppliers Applied Materials, KLA and Lam Research rose in premarket trading.

AI-darling Nvidia, meanwhile, edged up by 1.1% before the opening bell, while rival Advanced Micro Devices added 0.9%.

TSMC, whose clients include Nvidia as well as iPhone-maker Apple, reported a 39.1% jump in net profit to T$452.30 billion ($14.75 billion) for the three months to September 30. The figure was higher than a Reuters/LSEG estimate of T$417.7 billion.

Markets were primed for a strong reading, after TSMC disclosed a 30% spike in its quarterly revenue last week. Revenue rose to T$989.92 billion ($32.30 billion), while gross margin stood at 59.5%.

The world’s biggest manufacturer of cutting-edge AI chips also predicted that euphoria around AI would gather even more pace, projecting a jump in current-quarter revenue by as much as 24%. It also reiterated its forecast for capital spending of up to $42 billion this year, despite potential headwinds from sweeping U.S. tariffs and currency fluctuations.

TSMC CEO C.C. Wei struck a largely positive tone on expectations of AI-fuelled demand, and dismissed concerns over potential sales headwinds from the U.S. blocking chip sales to Chinese markets.

"We continue to observe robust AI-related demand throughout 2025… The explosive growth in token volume demonstrated increasing consumer AI model adoption, meaning more computation is needed," Wei said in a post-earnings call, noting that this was likely to underpin demand for semiconductors.

"I have confidence in my customers," Wei said when responding to an an analyst question regarding potential Chinese headwinds.

"If the China market is not available, I still think the AI growth will be very positive," Wei said, adding that he remained confident a compound annual growth rate of 40% or higher could be maintained even if Chinese markets were blocked out