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Taiwan Semiconductor Manufacturing Co. Ltd {{ m-tag option="price" ticker="TSM" currency="USD" }}, the world's largest contract chipmaker, is grappling with a 30% decline in third-quarter profits. It has recently abandoned its plans for an advanced chip plant in northern Taiwan due to local opposition.

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Q3 Financials: A Closer Look
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TSMC is expected to report a net profit of T$195.9 billion ($6 billion) for July-September, marking its second consecutive quarter of profit decline. Revenue for the quarter is estimated at around $17 billion, a 20% drop from the previous year.

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Market Dynamics: The Bigger Picture
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Global demand for semiconductors has weakened since the latter half of last year. However, analysts predict a rebound as inventories at smartphone and computer makers are depleting, and restocking demand is expected to rise.

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Future Outlook: What Analysts Say
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Morgan Stanley analysts forecast a 10% revenue growth for TSMC in the Q4, citing strong demand for high-end chips used in artificial intelligence. TSMC's stock has surged 23% this year, driven by the AI boom.

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Supplier Relations & Customer Demand:
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TSMC has reportedly told its significant suppliers to delay the delivery of high-end chip-making equipment due to concerns about customer demand, although this delay is expected to be short-term.
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Fubon Securities predicts a slow start for TSMC next year, particularly concerning Apple, a major customer, which may revise its orders. The market consensus may be overly optimistic, according to Fubon Securities.

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Global Expansion Plans:
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Despite domestic setbacks, TSMC is expanding globally, with two chip fabs in Arizona costing around $40 billion and a new campus in Japan's Kumamoto in partnership with Sony Group Corp.

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