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, World's Largest Contract Chipmaker & NVIDIA AI Supplier, Could Boost Output To 200,000 Wafers Per Month - Report

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. The Taiwan Semiconductor Manufacturing Company (TSMC) might expand its 2-nanometer wafer production to 200,000 units per month by 2027, suggest supply chain sources from Taiwan. The decision to expand 2-nanometer production is due to strong market demand, with big-ticket companies such as Apple, NVIDIA and Intel driving the demand for the manufacturing technology. Should TSMC expand production to 200,000 wafers per month, the 2-nanometer output will be the highest for TSMC's sub-7-nanometer manufacturing processes. Strong 2-nanometer Demand Could Make TSMC Expand Production To 200,000 Wafers Per Month, Says Report According to the report from the Taiwan Economic Daily, TSMC is on track to commence 2-nanometer mass production this year. In line with previous reports, the firm is expected to scale production up to 40,000 wafers per month by the end of 2025. However, strong demand for the leading-edge chip manufacturing process could cause TSMC to grow its production capacity five times by 2027 end. The potential production growth is due to demand from big-ticket American technology firms as well as some Taiwanese entities. The list includes NVIDIA, Apple, Intel, AMD and Mediatek. Apple typically gets the first batch of TSMC's high-end chips since its consumer-facing products do not require stringent performance. Apple is followed by firms like AMD and NVIDIA, who use the chips once TSMC has fine-tuned their production to meet heftier performance requirements. The details suggest that TSMC will initially grow its 2-nanometer production by 1.5x next year to 100,000 wafers per month by 2026 end. Following this growth, TSMC might decide to double its 2026 2-nanometer production to touch 200,000 wafers per month by 2027 end. The decision to double production will depend on demand from its customers. Should TSMC decide to increase its 2-nanometer production to 200,000 wafers per month by 2027 end, then the process will have become the biggest in terms of output among the firm's sub-7-nanometer technologies. At this level, the firm might utilize eight production plants, with most of the production occurring at the F22 plant in Kaohsiung, Taiwan. The 2-nanometer technology is TSMC's most advanced chip production technology, with the fab being the only entity in the world that manufactures such chips for external customers with high yields. While TSMC's Korean rival Samsung also offers similar products, its yield constraints have enabled the Taiwanese company to secure the lion's share of the global contract chip manufacturing market.

TSMC, NVIDIA's Main AI Chip Supplier, Earned $10 Billion In AI Revenue In Q2, Say Analysts

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. The Taiwan Semiconductor Manufacturing Company's (TSMC) partnership with NVIDIA enabled the firm to earn more than $10 billion in AI-related revenue in the second quarter, according to Taiwanese analysts. The trend is expected to continue in 2025 and it shows the growing importance of NVIDIA in TSMC's list of customers, which has been dominated by Apple so far. While TSMC primarily produces AI GPUs for NVIDIA, the firm also makes other AI chips such as application-specific integrated circuits. (ASICs) and memory controllers that work with high bandwidth memory. TSMC Expected To Grow Revenue By 30% In 2025 Due To AI, Say Analysts TSMC reported its second quarter earnings report last week and the results saw the firm grow its revenue by 61% primarily due to AI chip demand. The firm also forecast a midpoint revenue of $32.4 billion for the current quarter to hint towards a 38% annual revenue growth. Management revealed during the earnings call that advanced process technology families, used primarily in AI and top-tier consumer gadgets, accounted for 74% of TSMC's revenue during the second quarter. Out of the $31.7 billion in TSMC's second quarter revenue, one third, or roughly $10 billion, was accounted for by AI chips, according to Taiwanese analysts. TSMC's official figures show that 60% of the revenue came from high performance computing (HPC) applications while smartphones accounted for another 27%. During the earnings call, CEO Dr. C.C. Wei attributed the firm's 30% annual revenue growth guidance to AI-led HPC demand primarily due to the firm's 3-nanometer and 5-nanometer chip technologies. Not only did AI account for roughly 30% of TSMC's second quarter revenue, but the analysts also believe that for the full year, the firm could earn NT$868 billion through AI sales or $29.51 billion (1NT$ = $0.034). Should this occur, then TSMC's 2025 AI sales, led primarily by NVIDIA, will double over last year's NT$434 billion. The analysts add that in the future, AI could account for as much as half of TSMC's annual revenue. TSMC benefits from its close relationship to NVIDIA as it is the only contract manufacturer in the world capable of shipping leading-edge chips in volume. NVIDIA's latest GPUs rely on TSMC's 4-nanometer process, which is two generations behind the firm's latest technologies. Ahead of the 4-nanometer tech is the 3-nanometer technology currently used by Apple, while TSMC aims to kick off the mass production of its 2-nanometer technology this year.

How Taiwan Is Betting Big On AI To Power Its Economy - Taiwan Semiconductor (NYSE:TSM)

Tim Melvin's system has spotted 10X winners like NVIDIA and Matador -- see his next 6 picks and the options strategies to multiply gains at a free July 23 event. Register Here. Taiwan Semiconductor Manufacturing Co. TSM saw its stock recover some losses on Wednesday after closing lower on Tuesday. This rebound comes as the company continues to benefit from robust demand for artificial intelligence (AI) technologies and Taiwan unveils ambitious plans to bolster its position as a global AI powerhouse. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get StartedTaiwan's Strategic Push into AI Taiwan has launched its "Ten Major AI Infrastructure Projects," an initiative designed to inject over 15 trillion New Taiwan dollars (approximately $510 billion) into its economy by 2040, Reuters reported on Wednesday. This strategic move aims to leverage the island's established strengths in the information and communications technology (ICT) sector and its world-leading semiconductor industry to become a dominant force in the global AI landscape. Also Read: Taiwan Semiconductor Plans Four New Fabs As AI Gold Rush Continues At the heart of this initiative are three core technologies identified as strategic pillars: silicon photonics, quantum technology, and AI robotics. Silicon photonics, a key area of focus for Taiwan Semiconductor and other industry leaders, is crucial for integrating chip innovation with the evolving demands of AI. To cultivate a strong local ecosystem for AI robotics, Taiwan has also established the AI Robotics Industry Grand Alliance, with the backing of Foxconn Chairman Young Liu. Furthermore, the government intends to build a comprehensive quantum technology supply chain, enhance sovereign AI capabilities, expand computing infrastructure, and ensure that AI development is balanced across all regions of the island. To accelerate this transformation, the government will invest over 100 billion New Taiwan dollars ($3.08 billion) in AI-focused venture capital, aiming to create 500,000 jobs and establish three world-class research laboratories. Stargate Project Setbacks Trigger Dip Shares of Taiwan Semiconductor and its chipmaking peers, including Nvidia NVDA, Advanced Micro Devices AMD, Broadcom AVGO, and Qualcomm QCOM, fell on Tuesday after reports revealed deep internal conflicts between OpenAI's Sam Altman and SoftBank's SFTBY Masayoshi Son derailed the ambitious $500 billion Stargate AI project. The feud stalled progress, slashed the project's scale to one smaller Ohio site, and triggered investor concerns, dragging down semiconductor stocks worldwide. Price Action: TSM stock is trading higher by 1.19% to $237.40 premarket at last check Wednesday. Read Next: Amazon's AI-Powered Cost Cuts, Labor Gains And Record Prime Day Drive Analyst's Bullish Outlook Photo by YAKOBCHUK V via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$237.901.41%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum81.15Growth28.29QualityN/AValue49.76Price TrendShortMediumLongOverviewAMDAdvanced Micro Devices Inc$155.810.70%AVGOBroadcom Inc$279.640.38%NVDANVIDIA Corp$168.741.02%QCOMQualcomm Inc$159.100.70%SFTBYSoftBank Group Corp$38.41-%Market News and Data brought to you by Benzinga APIs

Wedbush Analyst Says TSMC Blowout Earnings Confirm AI Demand Is 'Really, Really Strong' -- Bullish Signal For Nvidia And Big Tech - NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL)

On Thursday, Wedbush Securities' Matt Bryson said Taiwan Semiconductor Manufacturing Co.'s TSM stellar second-quarter earnings leave little doubt that artificial intelligence (AI) demand remains red hot -- a promising signal for Nvidia Corporation NVDA and the broader tech sector. What Happened: In a conversation with Yahoo Finance following TSMC's earnings release, Bryson said that the report reinforces the strength of AI-related demand. "It tells us again that AI demand is really, really strong, and there's just no change there," said Bryson, managing director of equity research at Wedbush. He added, "With TSM telling you things are looking good this year, I think things look good for Nvidia." See Also: TSMC CEO Tells Trump $100 Billion US Chip Expansion Will 'Take Time' Amid Tariff Pressures, Surging AI Demand When asked if he has seen signs of a slowdown in AI demand, Bryson stated that he's been to California and Taiwan -- the supply chain is seeing demand lift. Moreover, there's still a shortage of new Blackwell chips, he added, referring to Nvidia's AI GPUs. Why It's Important: TSMC, the world's largest contract chipmaker and a key supplier to Nvidia and Apple Inc. AAPL, reported second-quarter revenue of $30.07 billion, up 38.6% year-over-year, beating expectations. In U.S. dollar terms, revenue growth hit 44.4% year-over-year, driven largely by advanced chips used in AI applications. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started TSMC has projected third-quarter 2025 revenue between $31.8 billion and $33.0 billion, compared to the analyst consensus of $32.7 billion. The company anticipates a gross margin in the range of 55.5% to 57.5% and an operating margin between 45.5% and 47.5%. Price Action: TSMC shares rose 3.38% on Thursday, closing at $245.60, before dipping slightly by 0.043% in after-hours trading, according to Benzinga Pro. Benzinga's Edge Stock Rankings indicate that TSMC continues to show consistent upward momentum across short, medium and long-term periods. While its growth indicators remain strong, the stock's value rating is relatively lower. Additional performance insights are available here. Read Next: Bill Gates Commits Majority Of $200 Billion Foundation Budget To Africa Over Next 20 Years Amid Trump's Massive USAID Cuts Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Jack Hong / Shutterstock.com AAPLApple Inc$210.240.04%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum27.72Growth32.35Quality76.36Value9.15Price TrendShortMediumLongOverviewNVDANVIDIA Corp$173.461.22%TSMTaiwan Semiconductor Manufacturing Co Ltd$245.503.34%Market News and Data brought to you by Benzinga APIs

Prediction: Taiwan Semiconductor Manufacturing Will Soar Over the Next 5 Years. Here's 1 Reason Why. | The Motley Fool

Chipmaking giant Taiwan Semiconductor Manufacturing (TSM 3.42%) -- also known as TSMC -- doesn't get the attention that other big tech companies tend to get, but it's an under-the-radar dynamo that powers much of the world's technology. Companies come to TSMC with chip designs; TSMC brings those designs to life. In the past five years, TSMC's stock is up around 252%, more than 2.5 times the S&P 500 index's gains in that span (as of July 14). Nobody knows how the stock will perform over the next five years, but I predict it will continue soaring. The reason? Its critical role in the artificial intelligence (AI) pipeline. TSMC's semiconductors power data centers, which together make training and deploying AI possible. Its ability is leagues ahead of competitors', making it the go-to for AI chip manufacturing, and the demand has begun showing in its financials. Management at the Taiwan-based company expects its AI accelerator revenue to double this year and produce a compound annual growth rate (CAGR) in the mid-40% range until 2029 (starting from 2024). This would be a huge boost to TSMC's revenue, which has been impressive already, more than doubling in the past five years. With major AI players like Nvidia and Advanced Micro Devices relying so heavily on TSMC, the chipmaker is uniquely positioned to benefit from the industry's natural growth. More AI adoption requires more AI training; more AI training requires more data centers; more data centers require more chips; and more chips require TSMC's manufacturing ability. No competitor can come reasonably close to TSMC's dominance in the next five years. That should reflect in its overall stock growth in that span.

Prediction: Nvidia Stock Will Soar in the Second Half of 2025, Thanks to This Incredible News From Taiwan Semiconductor Manufacturing | The Motley Fool

Investors continue to underestimate the artificial intelligence (AI) chipmaker. After a blistering run that spanned more than two years and stock price gains of over 1,000%, Nvidia (NVDA -0.42%) investors are taking a more measured approach. Concerns about the future growth prospects of artificial intelligence (AI), uncertainty about sales in China, and fears over the impact of tariffs have all weighed on the chipmaker in recent months. Perhaps the biggest question for investors is whether the AI revolution is sustainable. Many experts believe the widespread adoption of AI is just getting started, but investors have been looking for additional evidence. Taiwan Semiconductor Manufacturing (TSM -2.12%), commonly referred to as TSMC, reported its second-quarter results Thursday morning, providing the clearest sign yet that AI still has room to run. TSMC is the world's largest chip foundry, controlling an estimated 60% of the contract semiconductor manufacturing market. Perhaps more importantly, it has an estimated 90% of the market for the most advanced chips, those used for high-performance computing and AI -- and Nvidia is one of its biggest customers. As such, TSMC has its finger on the pulse of AI demand, and its recent performance is directly tied to the accelerating adoption of the technology. While TSMC investors had high hopes for the results, they got much more than they bargained for. In the second quarter, the company generated revenue of $30.1 billion, up 39% year over year and 11% quarter over quarter. This resulted in adjusted earnings per share (EPS) that surged 61% to a record high $2.47 (per American depositary receipt unit). To put the results into context with expectations, analysts' consensus estimates were calling for revenue of $30.2 billion and EPS of $2.38. The results were driven higher by TSMC's high-performance computing (HPC) division due to strong demand for AI. The company noted that its most advanced chips -- 7 nanometer and smaller -- represented 74% of total wafer sales during the quarter. If that weren't enough to get investors excited, TSMC raised its 2025 forecast and now expects full-year revenue to climb 30% in U.S. dollars. CEO C.C. Wei left no doubt about what drove the blockbuster results, which he said were "mainly due to continued robust AI and HPC-related demand." He went on to say that "recent developments are also positive to AI's long-term demand outlook." He pointed to increasing AI model usage and adoption, saying the company sees "AI demand continuing to be strong." There's no denying that Nvidia has been one of the primary beneficiaries of the broad adoption of AI. In the past, the company was primarily known as a gaming company, supplying the graphics processing units (GPUs) that create lifelike images in video games -- but those days are long gone. In Nvidia's fiscal 2026 first quarter, revenue of $44 billion jumped 69% year over year, but drilling down into the results tells a story. Data center revenue, including AI chips, soared 69% to a record $39 billion. At the same time, gaming and PC revenue jumped 42% to $3.8 billion. Put another way, Nvidia's data center sales accounted for 89% of the company's considerable revenue. That's why investors are watching so closely for any sign of weakening demand for AI, as it's so central to Nvidia's success over the past few years. Looking ahead, Nvidia is guiding for second-quarter revenue of roughly $45 billion, which would represent year-over-year growth of 50%. It's worth noting that Nvidia incurred a $4.5 billion charge in the first quarter, the result of export controls on its H20 chips destined for China. Just this week, CEO Jensen Huang revealed in a blog post that Nvidia has applied for a license to resume sales of these chips and had received assurances from the Trump administration that its application will be approved. Analysts estimate that the additional sales could be worth as much as $15 billion in the second half of the year. The available evidence suggests the AI revolution is alive and well. That, combined with the resumption of chip sales to China, suggests Nvidia has a long runway for growth ahead. And since it's selling for just 29 times next year's expected earnings, it's still attractively priced. And that's why I predict Nvidia stock will likely soar for the rest of 2025.

Taiwan Semiconductor Manufacturing Shares Rise on Strong Outlook. Is It Too Late to Buy the Stock? | The Motley Fool

The company continues to be an artificial intelligence (AI) infrastructure winner, as it is the world's leading maker of advanced chips for companies like Nvidia and Apple. Let's take a closer look at TSMC's results to see if the stock has more upside, or whether it's too late to buy the stock. With rivals Intel and Samsung struggling, TSMC has established itself as an invaluable part of the semiconductor value chain due to its scale and technological expertise. The company is the clear leader in manufacturing advanced chips, and more and more of its revenue is coming from its leading-edge nodes. Nodes are a reference to the size of how many transistors can be fit on a chip, and the smaller the node, the greater the processing power and efficiency a chip can have. In Q2, nodes 7 nanometers (nm) and under accounted for 74% of its revenue, up from 67% a year ago. Its newest 3-nm technology made up 24% of total wafer revenue, jumping from just 15% a year ago. AI chips were once again the biggest driver of TSMC's revenue growth, with high-performance computing (HPC) accounting for 60% of its revenue in the quarter. HPC revenue climbed 14% sequentially. A year ago, the segment accounted for 52% of the company's revenue. This helped drive a 44% increase in the company's revenue to $30.1 billion. Its earnings per American depositary receipt (ADR) soared 67% to $2.47 from $1.48 a year ago, while its EPS in local currency climbed 61%. TSMC once again saw strong year-over-year gross margin expansion; however, it is expecting to see pressure in the future. Gross margin increased 540 basis points year over year to 58.6%, despite the company seeing a currency headwind and dilution from the start-up of its new fab in Arizona. It expects gross margin to fall to 56.5% in Q3 due to currency and the further ramp-up of its new facilities in the U.S. and Japan. It also expects its non-Taiwanese fabs to negatively impact its gross margins by around 2% to 3% a year and then widen to 3% to 4% a year in the later stages of its build-out. Looking ahead, TSMC forecast Q3 revenue to come in between $31.8 billion and $33 billion, representing about 38% year-over-year growth at the midpoint. It projected its operating margin to range from 45.5% to 47.5%. TSMC raised its full-year revenue forecast, with it now projecting 30% growth, up from prior guidance of "close to the mid-20% range." The company pointed to accelerating AI demand as a key driver, noting that data center orders have strengthened meaningfully even compared to just three months ago. It also cited growing momentum from sovereign AI projects. That's translating into strong demand for its leading-edge 3-nm and 5-nm chip technologies. TSMC said it hasn't seen any change in customer behavior due to tariffs, but noted that the risk remains. The company is currently in the middle of investing $165 billion in advanced semiconductor manufacturing in the U.S. The construction of its second fab in Arizona is already complete, and its first fab is already in high-volume production. It has plans to build six fabs, two advanced packaging facilities, and create an R&D center. While tariff and trade policy concerns regarding semiconductors remain, the simple fact of the matter is that no other foundry in the world has the scale and technological expertise of TSMC. As such, it will continue to manufacture the majority of advanced chips and is one of the best-positioned companies to continue to benefit from the ongoing AI infrastructure build-out. While the company is expecting to see some gross margin pressure due to its overseas expansion, it has also seen strong pricing power, so it could have the ability to surprise to the upside in the coming years in this regard. TSMC also should benefit from the recent change of heart by the U.S. to allow Nvidia and Advanced Micro Devices to sell certain chips into China. Meanwhile, TSMC's stock remains attractively valued, trading at a forward price-to-earnings (P/E) ratio of 26 times based on analysts' 2025 estimates and price/earnings-to-growth ratio (PEG) of around 0.7. Stocks with PEG ratios below 1 are typically considered undervalued. Taken altogether, I think TSMC continues to be positioned as a long-term winner, and that it's not too late to buy the stock.

Is TSMC the Only AI Stock You Need? | The Motley Fool

Earnings season is kicking off again, and one of the biggest companies to report earnings so far is Taiwan Semiconductor Manufacturing (TSM -2.24%), or TSMC as it's also known. TSMC is the world's biggest manufacturer of semiconductors, and it pioneered the foundry model. Unlike most semiconductor manufacturers, TSMC doesn't do any chip design. It's a third-party foundry, meaning it only manufactures chips for other companies like Apple, Nvidia, Advanced Micro Devices, and others. That position makes it a bellwether in the industry as it handles more than half of third-party chip production in the world and roughly 90% of advanced chip production. TSMC has already been a winner in the AI era, and those AI tailwinds were on display again in the second-quarter earnings report. When revenue in the quarter jumped 38.6% to $30.1 billion, CFO Wendell Huang said, "Our business in the second quarter was supported by continued robust AI and HPC-related demand." TSMC's margins also improved with gross margin increasing 53.2% to 58.6%, an indication that the company is sharing in the spoils of the AI boom that have propelled stocks like Nvidia to all-time highs. The rise in gross margin seems to reflect the company's pricing power and increasing demand, and the complexity of AI chips. Advanced technologies, which are considered to be 7-nanometer (nm) chips or less, accounted for 74% of wafer revenue. More specifically: 36% came from 5nm, 24% from 3nm, and and 14% from 7nm chips. High-performance computing (HPC) chips generated 60% of TSMC's revenue, another sign that AI is driving the boom at the company. Outside of direct costs, TSMC's expenses are relatively minimal, and the company finished the quarter with an operating margin of 49.6%, another sign of its competitive advantage. On the bottom line, it reported earnings per American Depositary Receipt (ADR) of $2.47. The stock finished last Thursday's session up 3.4% on the report. With those gains, TSMC shares are up 23% year to date and have delivered steady gains since ChatGPT came out -- with the exception of the sell-off of the Liberation Day tariffs. Some investors have steered away from the company because it's headquartered in Taiwan, and there's a risk of China invading the island, though it appears to be small. However, for the business itself, its competitive advantages look more robust than ever. It has dominant market share in its industry. The next largest foundries, Samsung and Intel, have stumbled of late, and it seems to have a large lead in its technology capabilities. TSMC continues to look affordably priced at a price-to-earnings ratio of 29. Like the rest of the sector, the stock is vulnerable to the semiconductor cycle, and growth could slow, especially as the AI market matures. However, that valuation is in line with the S&P 500, but TSMC is growing much faster and seems like it has a clear runway for growth. TSMC may not achieve the skyrocketing growth of a company like Nvidia, but it could be the best way to get broad exposure to the AI boom. The stock has a wide economic moat, and its reasonable valuation also makes the stock an attractive buy. This isn't the only AI stock you need as there are plenty of other promising and high-performing stocks in the industry, but if you're new to investing or the AI sector, TSMC is an excellent first choice. Even after its rally over the past year, the stock has more upside potential. If AI continues to grow, TSMC will be a winner.

The Smartest Growth Stock to Buy With $10,000 Right Now | The Motley Fool

There are numerous stocks capitalizing on several growth trends currently, with one of the most significant being artificial intelligence (AI). Not every stock is a smart buy right now, but there is one that stands out above the rest as potentially the smartest stock pick. My smartest growth stock to buy now is Taiwan Semiconductor (TSM 2.35%). It occupies a crucial position within the chip fabrication industry and has massive tailwinds blowing in its favor. It also doesn't appear to be overly expensive, considering the growth it's expected to achieve over the next few years, making it an excellent stock to consider now. Taiwan Semiconductor is in an enviable position within the chip world. It has a dominant grip on the chip fabrication market, mainly due to its cutting-edge technology, superior yields, and neutral position. Taiwan Semiconductor boasts several of the world's top tech companies as clients, including Nvidia and Apple. These companies selected TSMC for the reasons listed above, but one of the biggest factors is that TSMC isn't trying to compete with any of its clients on the open market. It's only offering its foundry service to its customers, which assures its clients that it won't attempt to steal any proprietary technology for their own benefit. Taiwan Semi is also at the forefront of new chip technology, ensuring customers won't have to hop from foundry to foundry to access the latest technology. Later this year, TSMC is launching its 2nm (nanometer) chip node, and its 1.6nm node is scheduled for production next year. Management is excited about its 2nm node, as demand for this technology is exceeding that of 3nm and 5nm launches. This could indicate upcoming growth for TSMC, as the improvements that 2nm provides are drastic enough that the companies are willing to adopt this cutting-edge technology. The biggest improvement 2nm chips provide over previous generations is their power consumption. When configured for the same speed as 3nm chips, they consume 25% to 30% less power. Considering power consumption is a significant sticking point for AI, this improvement could lead to numerous upgrades, as the enhanced technology may pay for itself over its operational life. There are several reasons TSMC's stock looks promising, but how does its projected growth and valuation compare? At the start of 2025, management projected that its AI-related revenue would increase at a 45% compound annual growth rate (CAGR) over the next five years, with total revenue increasing at nearly a 20% CAGR. That's incredible growth, and everything TSMC has done so far in 2025 backs up that claim, if not advances it a bit further. TSMC's Q2 revenue increased 44% in U.S. dollars, which beat expectations. It also indicated 38% revenue growth for Q3, which is still an impressive figure considering its size. Taiwan Semiconductor is experiencing incredible growth and is expected to continue doing so for some time. However, the stock doesn't trade at much of a premium to the broader market. With the S&P 500 trading for 23.8 times forward earnings, TSMC's 24.6 times forward earnings doesn't look all that pricey. Essentially, you're buying a company that trades for the same price as the S&P 500, yet it is expected to grow at twice its historical average through 2030. That makes TSMC a no-brainer buy here, and I believe it's one of the smartest growth stocks for investors to buy now.

TSMC Earnings: AI Drives Demand | The Motley Fool

TSMC, as it is better known, missed analyst expectations for revenue in the second quarter, but currency exchange rate fluctuations were mostly to blame. Revenue still soared 44% in U.S. dollars thanks to soaring demand for the company's most advanced 3nm and 5nm node semiconductor chips. TSMC's 3nm nodes accounted for 24% of total revenue, while the 5nm nodes accounted for 36% of revenue. High-performance computing, which includes AI-related chips, accounted for 60% of revenue, up from 52% in the second quarter of last year. HPC revenue rose by 14% from the first quarter as AI infrastructure spending ramps up around the world. The ongoing shift toward TSMC's more advanced nodes benefited the company's profitability. Gross margin jumped more than 5 percentage points year over year to 58.6%, operating margin rose more than 7 percentage points to 49.6%, and net profit margin jumped nearly 6 percentage points to 42.7%. The company spent $9.63 billion on capital expenditures during the second quarter to support its growth, bringing the year-to-date total to $19.69 billion. For the third quarter of fiscal 2025, TSMC expects to generate revenue between $31.8 billion and $33 billion, a gross margin between 55.5% and 57.5%, and an operating margin between 45.5% and 47.5%. Shares of TSMC were up around 4% by noon on Thursday. Strong revenue growth, thanks to soaring demand for AI chips, along with even stronger earnings growth, was enough to push up the stock. TSMC has a stranglehold on the leading-node portion of the foundry market, making it the only game in town for AI chip designers like Nvidia (NVDA 1.06%) and Advanced Micro Devices (AMD 0.19%). With total planned AI infrastructure investments exploding, TSMC's advanced nodes will remain in high demand for the foreseeable future. While AI is a tailwind, macroeconomic uncertainty could eventually hurt demand for other types of chips.

TSMC: The Only AI Fab Game In Town (NYSE:TSM)

TSMC's rapid free cash flow and margin growth position it as the premier way to capitalize on the ongoing AI-driven Data Center upgrade cycle. Taiwan Semiconductor Manufacturing Company Limited aka TSMC (NYSE:TSM) expectedly submitted a strong earnings sheet for the second fiscal quarter. This comes amid a strong spending boom in the artificial intelligence market and soaring demand for AI I am interested in a lot of technology and AI stocks like Google, Nvidia, AMD, Tesla and Amazon. Analyst's Disclosure:I/we have a beneficial long position in the shares of TSM, NVDA, AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

TSMC Stock: Why I Have No Plans To Sell (NYSE:TSM)

I rate TSMC a Buy due to the company's leadership position in manufacturing AI chips and its strong fundamentals. Taiwan Semiconductor Manufacturing Company (NYSE:TSM) is the market leader in the foundry industry, with a 67.6% revenue market share. Most importantly, the company holds over 90% of the market share in the manufacturing of AI chips. The Royston Roche has over a decade of experience in the capital markets. He started his career with Infosys BPM., where he worked for its clients BNY Mellon and Deutsche Bank. Later, he worked with various investors, research companies, and investment firms like Tech Insider Network. Royston is known for his thoughtful and fair analysis of stocks. He is an expert in fundamental analysis and his investing style is buy-and-hold strategy. Royston has done MBA (Finance) from ICFAI University and an IMC from CFA UK. Analyst's Disclosure:I/we have a beneficial long position in the shares of TSM, NVDA, AMD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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.

TSM Could Be the Biggest Investment Opportunity Emerging From Trump's Bill | Investing.com UK

Taiwan Semiconductor Manufacturing (NYSE:TSM), also known as TSMC, is the world's largest contract chip manufacturer and has gained a reputation for its quality-focused processes and market-leading chips. Today, TSMC controls around two-thirds of its market share, which has helped the stock to achieve a 13-figure market capitalization following a period of significant growth in the wake of the global artificial intelligence boom. However, there appears to be plenty of room for further growth on the horizon for Taiwan Semiconductor Manufacturing, particularly in the wake of President Trump's 'Big Beautiful Bill,' which was recently passed by the Senate. Although the bill has been the subject of much debate, it comes with 35% tax credits for semiconductor firms that could make it more cost-effective for TSMC to build a functional domestic supply chain in the United States. The tax credits could be applied to TSMC provided that the company expands its advanced manufacturing in the US ahead of a specified 2026 deadline. Should Taiwan Semiconductor Manufacturing take advantage of the incentives, the company could further strengthen its presence in the United States, making it a global powerhouse in driving the infrastructure needed to support the artificial intelligence boom. Given that the global semiconductor market is expected to experience a compound annual growth rate (CAGR) of 10.24% between now and 2030 to reach a market volume of $1.29 trillion, TSMC's ability to grow alongside the industry could represent an opportunity. This rate of growth alone would be capable of driving Taiwan Semiconductor Manufacturing's market capitalization to $1.63 trillion by the end of the decade, driving the stock's value towards $300. However, with global semiconductor sales increasing by 19.1% in 2024, with double-digit growth anticipated in 2025, we could see the industry outpace its forecasts further. TSMC recently announced that its Q2 2025 revenue reached $30.07 billion, representing a new record high, while its AI-related business surpassed $10 billion in revenue for the first time. "Taiwan Semiconductor Manufacturing posted earnings of $2.47 per share, comfortably surpassing expectations by $0.09 and highlighting its strength in the race for AI manufacturing capacity," explained a Just2Trade market analyst. "Having raised its full-year revenue growth outlook to around 30% from 24% to 26% prior, it's clear that TSMC is exceptionally bullish for its foreseeable future." Needham analyst Charles Shi recently raised his price target for TSMC to $270 from $225, citing a perceived lack of competition over the foreseeable future. Based on Shi's estimates, the firm's AI revenue is expected to increase to $26 billion this year, while accelerating to $33 billion and $46 billion in 2026 and 2027, respectively. The firm's strong innovation pipeline has paved the way for far greater pricing power from the semiconductor giant. In the case of TSMC's 2-nanometer innovations, the company has been able to use its dominance to command $30,000 per chip, representing a 50% increase on its 3-nanometer prices. With 2026 expected to bring the arrival of 1.6-nanometer chips, Taiwan Semiconductor Manufacturing's strength could see further price hikes to match demand. Could investors buy into Taiwan Semiconductor Manufacturing today and expect the stock to reach a market capitalization of $2 trillion? The underlying data makes a move to $2 trillion feasible by 2030. From its current value, TSMC would need to grow by 75% over the next five years at a CAGR of 11%. Given that the firm's publicly stated AI revenue target is around $90 billion by 2029, this rate of growth would be far slower than the company's own expectations. Given that the stock offers a 1% dividend yield, TSM would deliver around 12% returns over the next five years on its path to becoming a $2 trillion stock. With a forward price-to-earnings ratio of 28.01, it's clear that TSM is exceptionally highly valued among investors, but the company's lofty growth expectations appear to be achievable given the high potential of the global semiconductor market. With this in mind, a fair value price of around $280 seems appropriate when considering TSMC's high potential for growth over the rest of the decade while balancing out any prospective challenges to the firm's market position. Challenges to Taiwan Semiconductor Manufacturing's market dominance could lie away from its competitors. The Trump administration's determined protectionist approach appears set to incentivize domestic supply chains for firms like TSMC while punishing exports. The stock stuttered recently off the back of news that US Commerce Department official Jeffrey Kessler told TSMC, as well as Samsung Electronics (LON:0593xq), that he wanted to cancel their waivers that allow the companies to send US technology to their factories in China. Although a White House official claimed that the move was merely 'laying the groundwork' in case ongoing trade negotiations between the United States and China collapse, it underlines the pace at which conditions can change for market leaders. Another risk comes in the form of rapidly emerging competition. Although TSMC currently has the dominance to set the prices of its chips, lower-cost rivals could force a more competitive pricing structure that eats into revenues. While it's unlikely that Taiwan Semiconductor Manufacturing will be usurped for quality, budget options could become more appealing to adopters seeking to buy into AI hype without betting the house on the technology. It's exceptionally rare to see a single company emerge as a dominant force in a rapidly emerging and highly lucrative market. Taiwan Semiconductor Manufacturing Company is not only strong enough to produce unrivalled hardware to support the emergence of artificial intelligence, but it's also in line to benefit from President Trump's 'Big Beautiful Bill' should the firm seek to use tax credits to build a supply chain within the United States. Should TSMC realize its AI revenue ambitions by 2029, the stock would cement its position as one of Wall Street's biggest performers of the decade. While the unpredictability of the Trump administration and its protectionist policies could hamper the firm's market position in the future, it appears clear that TSM is a stock that has plenty of room to grow further, assuming that a major rival doesn't rapidly emerge tomorrow. With this in mind, Taiwan Semiconductor Manufacturing Company is a stock that deserves close attention in 2025 and beyond.