TSMC Reports Record Profit Amid Surging AI Chip Demand, Raises 2025 Outlook

TSMC posts record quarterly profit on AI demand, but wary about tariffs

TAIPEI, July 17 (Reuters) - TSMC (2330.TW), opens new tab, the world's main producer of advanced AI chips, posted record, forecast-beating quarterly profit on Thursday but warned that future income might be hit by U.S. tariffs, though perhaps not until the fourth quarter. Saying demand for artificial intelligence was getting stronger and stronger, Taiwan Semiconductor Manufacturing Co predicted another leap in sales for the third quarter and hiked its revenue outlook for the full year. It also noted that key client Nvidia (NVDA.O), opens new tab had recently been allowed by the U.S. government to resume sales to China of its H20 AI chip. "China is a big market, and my customer can continue to supply the chip to the big market, and it's very positive news for them and in return it's very positive news for TSMC," Chief Executive C.C. Wei told a press conference. But momentum for fourth-quarter earnings could be different. "We are taking into consideration the possible impact of tariffs and a lot of other uncertainties, so we are becoming more conservative," he said, though he added that TSMC had yet to see any changes in customer behaviour so far. A 60% SURGE In April-June, net profit hit a historic high of T$398.3 billion ($13.5 billion), up 60.7% year-on-year and marking its fifth straight quarter of double-digit growth. That was well ahead of a T$377.9 billion LSEG SmartEstimate. For the current quarter, it predicted a leap in revenue of up to 40% and for the full year, it now estimates revenue growth of around 30% in U.S. dollar terms, up from a previous forecast of "close to the mid-20s". But while sales are roaring, TSMC said the Taiwan dollar's appreciation against the U.S. dollar - around 12% so far this year - would dent margins. Its third-quarter gross margin is expected to fall to between 55.5% and 57.5%, down from 58.6% in the second quarter, also hurt by TSMC's ramp-up of investment in new U.S. and Japanese factories. However, the company stuck to its capital expenditure plan for the year of $38 billion to $42 billion, and Chief Financial Officer Wendell Huang said it was very unlikely such spending would suddenly drop going forward. TSMC announced plans for a $100 billion U.S. investment with U.S. President Donald Trump at the White House in March, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. But Trump has said semiconductor-specific tariffs could come soon. Taiwan was also threatened with a 32% reciprocal tariff rate in April, although it has yet to be notified of an updated figure that some countries have received. TSMC's second-half earnings could also be affected if sales for Apple, another major customer, disappoint, said Allen Huang, a vice president at Taiwan's Mega International Securities Investment Services. Apple typically launches new products in the fourth quarter. "One warning sign is that Apple's sales in China have been soft," he said, adding that this was likely a factor in TSMC's caution about earnings towards the end of the year. Taiwan-listed shares in TSMC surged some 80% last year but have climbed just 5% for the year to date on worries about tariffs and unfavourable currency exchange rates. ($1 = 29.4400 Taiwan dollars) Reporting by Wen-Yee Lee and Ben Blanchard; Editing by Anne Marie Roantree and Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Ben Blanchard Thomson Reuters Ben joined Reuters as a company news reporter in Shanghai in 2003 before moving to Beijing in 2005 to cover Chinese politics and diplomacy. In 2019 Ben was appointed the Taiwan bureau chief covering everything from elections and entertainment to semiconductors.

TSMC rides AI boom to strongest quarter in company history

TSMC is riding high on the AI wave. The world's largest contract chipmaker reported second-quarter earnings Thursday that blew past expectations, with net income jumping nearly 61% year over year to NT$398.3 billion ($12.7 billion) and revenue climbing almost 39% to NT$933.8 billion ($31.7 billion). Both figures beat Wall Street estimates and marked a new all-time high for the company. Behind the massive jump? Unrelenting demand for artificial intelligence chips. High-performance computing (HPC) -- a category that includes AI and 5G-related chips -- accounted for 60% of TSMC's revenue last quarter, up from 52% a year ago. The company manufactures advanced processors for big names like Nvidia, Apple, AMD, and Qualcomm, and its most cutting-edge chips -- those made with 7-nanometer processes or smaller -- made up a whopping 74% of its total wafer revenue. CEO C.C. Wei told investors TSMC now expects full-year revenue to grow around 30% in U.S. dollar terms, up from its previous forecast of 24%-26%. For the third quarter, the company is guiding for revenue between $31.8 billion and $33 billion -- well ahead of what analysts were expecting. Shares of TSMC rose nearly 4% in U.S. trading after the report. That said, the company isn't immune to broader risks. It's watching for potential trade tensions with the U.S., including possible new tariffs on semiconductors. There's also the usual foreign exchange pressures and signs that demand from PC and smartphone makers could soften. Still, with demand for AI infrastructure continuing to boom, TSMC's positioning at the heart of the global chip supply chain gives it a major edge.

TSMC's quarterly profit jumps 60% on continued AI chip demand - SiliconANGLE

Taiwan Semiconductor Manufacturing Co. today posted second quarter results that topped the consensus estimate across the board. The world's largest contract chipmaker saw its profit jump 60.7% year-over-year in the three months through June. TSMC closed the quarter with net income of 398.27 billion New Taiwan dollars, or $13.55 billion. Analysts had expected $12.86 billion. TSMC's revenue climbed 38% year-over-year to $31.7 billion, slightly higher than the consensus estimate. The sales growth was driven partly by the continued momentum of the company's high-performance computing segment, which includes artificial intelligence and 5G networking chips. The segment accounted for 60% of TSMC's second quarter revenue, up from 52% a year ago. Many of the AI chips that customers order from the company are made using its latest manufacturing processes. According to TSMC, 7-nanometer and smaller nodes drove nearly three quarters of its wafer revenue in the second quarter. The company is building a $165 billion manufacturing campus in Arizona to meet U.S. customers' for its advanced processes. The first fab on the site, which uses a four-nanometer node, began mass production late last year. Two more chip factories are set to start making chips by the end of the decade. TSMC Chief Executive Officer C. C. Wei told investors today that the company is accelerating construction of the second and third fabs by "by several quarters" to meet demand. Earlier, the company disclosed that the Arizona campus' manufacturing capacity is fully booked through the end of 2027. TSMC broke ground on its third, most advanced fab in Arizona this past April. It will make chips using the company's upcoming 1.6-nanometer process. The node includes a technology called Super Power Rail that boosts chips' power efficiency by reducing voltage drops, or fluctuations in the amount of power delivered to a processor's transistors. TSMC's Arizona campus is expected to host up to to six fabs once it's fully operational. The company is also building a research and development hub, as well as two factories dedicated to making packaging components. Packaging is the technology used to link together multiple semiconductor modules into a single chip. "After completion, around 30% of our 2-nanometer and more advanced capacity will be located in Arizona, creating an independent, leading-edge semiconductor manufacturing cluster in the U.S.," Wei told investors. TSMC expects to generate $31.8 billion to $33 billion in sales during the current quarter, which would represent a 38% increase at the midpoint. For the full year, the company has raised its revenue growth guidance from between 24% and 26% to 30%. Even so, it expects to miss the $124.9 billion projected by analysts. "Looking ahead to the second half of the year, we have not seen any change in our customers' behavior so far," Wei said. "However, we understand there are uncertainties and risks."

TSMC lifts 2025 outlook in a big boost for AI demand hopes

Gift 5 articles to anyone you choose each month when you subscribe. Taiwan Semiconductor Manufacturing raised its outlook for 2025 revenue growth, shoring up investors' confidence in the momentum of the global AI spending spree. The world's biggest contract chipmaker on Thursday forecast sales growth of about 30 per cent in US dollar terms this year, up from mid-20 per cent previously. That reinforced expectations that tech firms from Meta Platforms to Google will keep spending to build the data centres essential to artificial intelligence development.

Chip Maker TSMC Boosts Outlook for Revenue Amid Strong AI Demand

TSMC's second-quarter earnings per share and revenue came in higher than estimates. Taiwan Semiconductor Manufacturing Co. (TSM) boosted its full-year revenue growth projection to around 30%, with strong AI demand fueling results at the world's largest contract chipmaker. TSMC's forecast sent shares in the Taiwan-based company, which works with tech heavyweights Apple (AAPL) and Nvidia (NVDA), almost 4% higher in premarket trading Thursday. The shares have risen roughly 18% this year so far. The company expects its 2025 revenue to rise around 30% in U.S dollar terms, TSMC CEO C.C. Wei said in the company's second-quarter earnings call, according to a transcript provided by AlphaSense. In April, Wei had said he expected the chipmaker's full-year revenue to rise by "close to mid-20s percent." The chipmaker said it expects revenue of between $31.8 billion and $33 billion during the third quarter. At the midpoint of the range, that was higher than Visible Alpha's consensus estimate of 932.04 billion New Taiwan dollars, or about $31.67 billion. Meanwhile, the company registered second-quarter earnings per share of 15.36 New Taiwan dollars on revenue that rose 39% year-over-year to NT$933.79 billion. Analysts polled by Visible Alpha expected NT$14.6 and NT$929.79 billion, respectively.

Chip Maker TSMC's Stock Rises on Upbeat Outlook for Revenue, Strong AI Demand

TSMC's second-quarter earnings per share and revenue came in higher than estimates. Taiwan Semiconductor Manufacturing Co. (TSM) boosted its full-year revenue growth projection to around 30%, with strong AI demand fueling results at the world's largest contract chipmaker. TSMC's forecast sent shares in the Taiwan-based company, which works with tech heavyweights Apple (AAPL) and Nvidia (NVDA), almost 4% higher Thursday trading. The shares had risen roughly 18% this year through yesterday's close. The company expects its 2025 revenue to rise around 30% in U.S dollar terms, TSMC CEO C.C. Wei said in the company's second-quarter earnings call, according to a transcript provided by AlphaSense. In April, Wei had said he expected the chipmaker's full-year revenue to rise by "close to mid-20s percent." The chipmaker said it expects revenue of between $31.8 billion and $33 billion during the third quarter. At the midpoint of the range, that was higher than Visible Alpha's consensus estimate of 932.04 billion New Taiwan dollars, or about $31.67 billion. Meanwhile, the company registered second-quarter earnings per share of 15.36 New Taiwan dollars on revenue that rose 39% year-over-year to NT$933.79 billion. Analysts polled by Visible Alpha expected NT$14.6 and NT$929.79 billion, respectively.

TSMC posts record quarterly profit on AI demand, but wary about tariffs

TSMC, the world's main producer of advanced AI chips, posted record, forecast-beating quarterly profit on Thursday but warned that future income might be hit by U.S. tariffs, though perhaps not until the fourth quarter. Saying demand for artificial intelligence was getting stronger and stronger, Taiwan Semiconductor Manufacturing Co predicted another leap in sales for the third quarter and hiked its revenue outlook for the full year. It also noted that key client Nvidia had recently been allowed by the U.S. government to resume sales to China of its H20 AI chip. "China is a big market, and my customer can continue to supply the chip to the big market, and it's very positive news for them and in return it's very positive news for TSMC," Chief Executive C.C. Wei told a press conference. But momentum for fourth-quarter earnings could be different. "We are taking into consideration the possible impact of tariffs and a lot of other uncertainties, so we are becoming more conservative," he said, though he added that TSMC had yet to see any changes in customer behavior so far. In April-June, net profit hit a historic high of T$398.3 billion (US$13.5 billion), up 60.7 per cent year-on-year and marking its fifth straight quarter of double-digit growth. That was well ahead of a T$377.9 billion LSEG SmartEstimate. For the current quarter, it predicted a leap in revenue of up to 40 per cent and for the full year, it now estimates revenue growth of around 30 per cent in U.S. dollar terms, up from a previous forecast of "close to the mid-20s." But while sales are roaring, TSMC said the Taiwan dollar's appreciation against the U.S. dollar - around 12 per cent so far this year - would dent margins. Its third-quarter gross margin is expected to fall to between 55.5 per cent and 57.5 per cent, down from 58.6 per cent in the second quarter, also hurt by TSMC's ramp-up of investment in new U.S. and Japanese factories. However, the company stuck to its capital expenditure plan for the year of $38 billion to $42 billion, and Chief Financial Officer Wendell Huang said it was very unlikely such spending would suddenly drop going forward. TSMC announced plans for a $100 billion U.S. investment with U.S. President Donald Trump at the White House in March, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. But Trump has said semiconductor-specific tariffs could come soon. Taiwan was also threatened with a 32 per cent reciprocal tariff rate in April, although it has yet to be notified of an updated figure that some countries have received. TSMC's second-half earnings could also be affected if sales for Apple, another major customer, disappoint, said Allen Huang, a vice president at Taiwan's Mega International Securities Investment Services. Apple typically launches new products in the fourth quarter. "One warning sign is that Apple's sales in China have been soft," he said, adding that this was likely a factor in TSMC's caution about earnings towards the end of the year. Taiwan-listed shares in TSMC surged some 80 per cent last year but have climbed just five per cent for the year to date on worries about tariffs and unfavourable currency exchange rates.