By Yimou Lee, Ben Blanchard and Faith Hung

TAIPEI (Reuters) -Taiwan’s TSMC, the world’s largest contract chipmaker, forecast on Thursday its revenue in the current quarter will increase by as much as 34%, driven by robust demand for semiconductors used in artificial intelligence.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple Inc and Nvidia supplier, also posted a second-quarter profit that beat market expectations.

The bellwether for the chip industry has benefited from a surge in adoption of AI that has helped it weather the tapering off of pandemic-led electronics demand.

TSMC’s April-June net profit climbed to T$247.8 billion ($7.60 billion) from T$181.8 billion a year earlier.

The profit beat a T$238.8 billion estimate for the quarter ended June 30, according to an LSEG SmartEstimate drawn from 21 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.

“Moving into the third quarter of 2024, we expect our business to be supported by strong smartphone and AI-related demand for our leading-edge process technologies,” CFO Wendell Huang told an earnings conference.

Second-quarter revenue at TSMC, Asia’s most valuable publicly listed company, rose by 33% to $20.8 billion, better than the company’s previous forecast of $19.6 billion to $20.4 billion.

For the current quarter, revenue is expected to be $22.4 billion to $23.2 billion compared with $17.3 billion in the year-ago quarter, TSMC said at the conference.

Capital expenditure in the second quarter was $6.36 billion, TSMC said, compared with $5.77 billion in the first quarter.

TSMC’s Taipei-listed shares have been battered for the past two days after comments by the Republican candidate for the U.S. presidency, Donald Trump, that Taiwan “did take about 100% of our chip business” and should pay the U.S. for its defence.

Asked at the earnings conference if TSMC would consider a joint venture following Trump’s comments, Chairman and CEO C.C. Wei said “no”.

The company’s shares closed down 2.4% on Thursday.

($1 = 32.6000 Taiwan dollars)

(Reporting by Yimou Lee, Ben Blanchard and Faith Hung; Additional reporting by James Pomfret; Writing by Anne Marie Roantree; Editing by Christopher Cushing and Muralikumar Anantharaman)

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