Chip values soar thanks to impressive figures from TSMC.

The stocks of the semiconductor industry experienced a significant upward trend after Taiwan Semiconductor Manufacturing (TSMC), the world's largest producer of advanced chips and a key player in the current AI boom, presented impressive quarterly figures. In pre-market trading, Nvidia's shares rose by 2.5%, while AMD and Broadcom recorded increases of 3% and 1.9%, respectively. Intel also rose by 1%, Qualcomm by 1.9%, and Micron Technology by 2.2%. TSMC reported a net profit increase of 54%, as global demand driven by AI applications benefits semiconductor manufacturers. The net profit for the third quarter amounted to 325.3 billion Taiwan dollars (approximately 10.1 billion USD), surpassing the estimate of 300.2 billion Taiwan dollars gathered by Reuters over the LSEG. The net revenue for the third quarter reached 23.5 billion USD, representing a 36% increase compared to the previous year. The company's gross margin improved to 57.8% in the period from July to September, compared to 54.3% in the previous year. In a statement, TSMC emphasized that business in the third quarter was supported by strong demand for smartphones and AI-related applications for its industry-leading 3nm and 5nm technologies. During an earnings call, TSMC Chairman and CEO C.C. Wei highlighted that demand for AI is "real" and the company has experienced the "deepest and widest growth in this industry." TSMC plans to increase its investments to a little over 30 billion USD this year. The company's investments rose to 6.4 billion USD in the third quarter, up from 6.36 billion USD in the previous three months. Paul Marino, Chief Revenue Officer at Themes ETFs, told Investing.com that TSMC is a key indicator of how quickly the expansion of the AI movement and hyper data centers can progress and how healthy the supply dynamics are in this area. TSMC's Taipei-listed shares have risen by nearly 80% since the beginning of the year, significantly outperforming the broader market, which saw an increase of 28.57%. The company's strong quarterly figures have improved investor sentiment after European chipmaker ASML recently caused uncertainty with disappointing forecasts and results. ASML's weak forecasts had raised doubts among investors about whether AI demand is indeed as large as predicted. This draws attention to the future forecasts of all other semiconductor companies. Nevertheless, Marino believes there is significant demand from companies like AMD and Nvidia, and investors will be watching for robust forecasts to justify current valuations when they report later in the quarter.