TSMC Achieves Record Profit Amid AI Boom, Highlighting Industry's Rapid Growth

TSMC posts record profit on AI boom

Taiwan Semiconductor Manufacturing Company reported its highest quarterly profit, fuelled by the artificial intelligence boom. The Taiwanese chipmaker on Thursday reported NT$452.3bn ($14.8bn) in net earnings for the third quarter, a 39.1 per cent jump year-on-year, along with a 6 per cent rise in revenues on the previous quarter to NT$989.9bn. Shares in the world's largest chipmaker have gained over 40 per cent in the past 12 months as a result of soaring demand for high-performance semiconductors, as companies race to build infrastructure for artificial intelligence data centres.

TSMC Q3 profit expected to set record on AI spending boom

TAIPEI, Oct 16 (Reuters) - TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is set to post a 28% jump in third-quarter profit to reach a record high due to surging demand for AI infrastructure, though U.S. tariffs may complicate its outlook. Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, the world's biggest contract chipmaker and a key supplier to Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab, is likely to report a net profit of T$417.7 billion ($13.65 billion) for the three months through September 30, showed an LSEG SmartEstimate compiled from 20 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC has already flagged a market-forecast-beating rise in third-quarter revenue of 30%. Any profit result above T$398.3 billion would be the chipmaker's highest-ever and its seventh consecutive quarter of profit growth. TSMC, Asia's most-valuable listed company with a market capitalisation of around $1.2 trillion - nearly three times that of South Korean rival Samsung Electronics (005930.KS), opens new tab - will report financial results on Thursday and provide fourth-quarter guidance in an earnings call scheduled for 0600 GMT. On Wednesday, top semiconductor equipment maker ASML (ASML.AS), opens new tab, for whom TSMC is a major customer, said third-quarter bookings beat market forecasts but that it expected a significant fall in demand from China next year. Samsung on Tuesday said it expected its biggest quarterly profit in over three years, also on the AI boom. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are currently subject to a 20% tariff, but that excludes chips. U.S. Secretary of Commerce Howard Lutnick proposed last month that Taiwanese companies split their production of chips 50-50 between Taiwan and the U.S., compared to the current setup where the vast majority of production is on the island. Taiwan has rejected that idea. TSMC is already investing $165 billion building factories in the U.S. in the state of Arizona. Shares in TSMC have gained 36% so far this year on optimism over AI, largely brushing off tariff concerns. The heavyweight's rise has powered the benchmark Taiwanese index's (.TWII), opens new tab 18% advance over the same period. ($1 = 30.6110 Taiwan dollars) Reporting by Ben Blanchard; Editing by Christopher Cushing Our Standards: The Thomson Reuters Trust Principles., opens new tab

TSMC hits yet another record as profit surges 39%, beating estimates on AI chip demand surge

The TSMC logo is displayed on a building in Hsinchu, Taiwan April 15, 2025. Taiwan Semiconductor Manufacturing Company on Thursday reported a 39.1% increase in third-quarter profit from last year, hitting a fresh record as demand for artificial intelligence chips stayed strong. Here are the company's results versus LSEG SmartEstimates: TSMC's revenue in the September quarter rose 30.3% from a year ago to NT$989.92 billion, beating estimates. TSMC's high-performance computing division, which encompasses artificial intelligence and 5G applications, drove third-quarter sales. As Asia's largest technology company by market capitalization, TSMC has benefited from the artificial-intelligence megatrend as it manufactures advanced AI processors for clients, including Nvidia and Apple. TSMC said advanced chips, with sizes 7-nanometer or smaller, accounted for 74% of TSMC's total wafer revenue in the quarter. In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency.

Nearly 40% jump in net profit: Chipmaker TSMC capitalises on AI boom

Taiwan Semiconductor Manufacturing Corp., the world's biggest semiconductor manufacturer, reported an unexpected jump in its net profit for the July-September quarter. Beating analysts' forecasts, the Taiwanese chipmaking giant TSMC said on Thursday that its net profit surged by 39.1% in the last quarter, boosted by a surge in AI use. The company reporteda record net profit of 452.3 billion new Taiwan dollars (€12.64bn) in the July-September quarter, higher than analysts' forecasts. The company earlier said its revenue jumped 30% year-on-year in the last quarter. "Our business in the third quarter was supported by strong demand for our leading-edge process technologies," said Wendell Huang, senior VP and chief financial officer of TSMC. The semiconductor firm has been building chip fabrication plants in the United States and Japan to help hedge against risks from China-US trade tensions. The chipmaker is a major supplier to companies such as Apple and Nvidia. "Demand for TSMC's products is unyielding," Morningstar analysts wrote in a note this month. "Given TSMC's dominance, we doubt the company would be hindered if it faced tariffs on shipments to US customers. We expect AI demand to stay resilient." US Commerce Secretary Howard Lutnick proposed last month that computer chip production be divided 50-50 between Taiwan and the US. Taiwan, where the majority of global chip manufacturing is currently based, rejected that idea. The company has committed $100bn (€86bn) in US investments, including building new factories in Arizona, on top of $65bn (€55.8bn) that it pledged earlier. "Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies," Huang said. Based on the company's current business outlook, they expect revenue to be at least €27.62bn (between $32.2bn and $33.4bn), in the fourth quarter of 2025. In 2024, fourth-quarter revenue came in at around €24.3bn.

AI boom delivers record net profit for Taiwan's TSMC

Taipei (AFP) - Taiwanese tech titan TSMC reported Thursday a record net profit for the third quarter on skyrocketing demand for microchips used to power iPhones and artificial intelligence. Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, has been a massive beneficiary of the frenzy in AI investment. TSMC's clients Nvidia and Apple are among firms pouring many billions of dollars into chips, servers and data centres, fuelling concerns about a financial bubble. "AI demand actually continues to be very strong -- stronger than we thought three months ago," TSMC chairman and chief executive CC Wei told a briefing. TSMC said net profit for the three months to September soared 39.1 percent from a year ago to NT$452.3 billion (US$14.7 billion), a quarterly record. The figure beat expectations of NT$406.67 billion, according to a Bloomberg News survey of analysts. Third-quarter revenue was up 30 percent, also higher than forecasts. TSMC's announcement follows a flare-up in trade tensions between Washington and Beijing, and concerns about US export restrictions to China and possible tariffs on chips. China's rare earth export curbs and bid to ramp up its own chip industry has also sparked fears about the impact on AI. Even if the Chinese market were not available to TSMC and its customers, Wei said "AI growth will be very dramatic" and "very positive". AI-related spending is soaring worldwide, and is expected to reach approximately $1.5 trillion by 2025, according to US research firm Gartner, and over $2 trillion in 2026 -- nearly two percent of global GDP. "It's not just Apple's new iPhone driving sales. AI clients like Nvidia and AMC are ramping up orders for high-end chips as well," Dilin Wu, research strategist at Pepperstone, told AFP ahead of the earnings release. "It shows TSMC's technology and capacity are still hard to replicate, and that underpins both margins and valuations for the company." Looking ahead, Wu said companies "might pull forward shipments to avoid restrictions, so basically front-running the tariffs." That would be "especially AI chip and GPU clients, certainly in the Chinese market," she said. The concentration of production in Taiwan has long been seen as a "silicon shield" protecting it from an attack by China, which claims it as part of its territory -- and an incentive for the United States to defend it. While TSMC plans to invest an additional US$100 billion in the United States, Washington has been pressuring Taipei to shift more production to US soil. US Secretary of Commerce Howard Lutnick said recently he had proposed to Taiwan a 50-50 split in chip production, which Taipei rejected.

Chipmaker TSMC reports nearly 40% surge in its net profit, thanks to AI

The chipmaker beat expectations with a record $15 billion in net profit for the third quarter. Taiwan's leading computer chip maker, TSMC, said Thursday that its net profit surged nearly 40% in the last quarter, boosted by the surge in use of artificial intelligence. Taiwan Semiconductor Manufacturing Corp. is the world's biggest semiconductor manufacturer. It reported a net profit of a record 452.3 billion new Taiwan dollars ($15 billion) in the July-September quarter, higher than analysts' forecasts. The company earlier said its revenue jumped 30% year-on-year in the last quarter. TSMC has been building chip fabrication plants in the United States and Japan to help hedge against risks from China-U.S. trade tensions. The chipmaker is a major supplier to companies such as Apple and Nvidia. "Demand for TSMC's products is unyielding," Morningstar analysts wrote in a note this month. "Given TSMC's dominance, we doubt the company would be hindered if it faced tariffs on shipments to U.S. customers. We expect AI demand to stay resilient." U.S. Commerce Secretary Howard Lutnick proposed last month that computer chip production be divided 50-50 between Taiwan and the U.S. Taiwan -- where the majority of global chip manufacturing is currently based -- rejected that idea. The company has committed $100 billion in U.S. investments, including building new factories in Arizona, on top of $65 billion that it pledged earlier.

3nm and 5nm Chips Drive TSMC Record-Breaking Quarter

TSMC just posted another strong quarter, showing how much demand there still is for advanced chips, especially those built for AI. In the third quarter of 2025, the company reported revenues of about 27.6 billion USD, up by more than a third compared to the same period last year. Profit also jumped nearly 40 percent, reaching roughly 12.6 billion USD. Much of this growth comes from TSMC's cutting-edge 3nm manufacturing process, which is used in some of the fastest and most efficient chips available today. About 23 percent of the company's wafer sales came from 3nm production this quarter, slightly down from 26 percent earlier in the year. The 5nm node, however, continues to perform even better, accounting for 37 percent of total wafer revenue. Together, these two process technologies make up the majority of TSMC's output and are behind products from brands like Apple, Qualcomm, and Nvidia. The booming AI sector is a major reason for these strong results. Companies such as Nvidia, AMD, and Broadcom all rely on TSMC to produce the GPUs and AI processors that power everything from data centers to personal computers. As AI workloads grow larger and more complex, the need for efficient, high-performance chips continues to rise -- something TSMC is uniquely positioned to deliver. Apple remains another big driver of TSMC's success. Its latest A-series and M-series processors use 3nm technology, which helps improve battery life and performance in the newest iPhones, iPads, and Macs. Qualcomm and MediaTek are also expanding their use of advanced nodes, ensuring that mobile and AI demand keep TSMC's production lines busy. Looking forward, TSMC expects demand to remain strong as AI continues to shape the semiconductor landscape. The company is already preparing for its next generation of manufacturing processes, including 2nm and improved N3E nodes, which promise even better energy efficiency and performance. Source: tsmc

TSMC posts $33.1 billion for the quarter, its best quarter in history thanks to AI, HPC demand

TL;DR: TSMC achieved a record Q3 2025 with $33.1 billion revenue, driven by 57% sales from AI and HPC demand. Net income rose 39.1% year-over-year, supported by advanced process technologies powering AI accelerators, CPUs, and Apple's latest chips. Strong AI demand and customer outlook reinforce TSMC's growth momentum. TSMC has reported its best quarter in history, with its Q3 2025 earnings report driven by the unstoppable AI and HPC demand, which makes up around 57% of its sales. TSMC posted $33.1 billion of revenue for Q3 2025, which is up an astounding 40.8% year-over-year, and 10.1% quarter-over-quarter, with a net income of $14.77 billion, which is up 39.1% year-on-year. TSMC's gross margin hit 59.5%, an excellent result for a foundry that is a contract chip maker for other companies and doesn't sell products itself. The company has enjoyed its best quarter yet thanks to the unstoppable sales of AI accelerators and various AI infrastructure processors including CPUs, DPUs, and networking components. Q3 2025 saw the company also taking in revenue from Apple's latest A19, A19 Pro, and M5 processors made on its N3P process node. Looking at TSMC's revenue pie for Q3 2025, HPC commands a huge 57% part of that, smartphone processors (from Apple, Qualcomm, MediaTek, and others) is in second place with 30%, after that is automotive with 5% and IoT also with 5%, leaving the rest in smaller parts of the Q3 2025 revenue pie. Note: TSMC's HPC platform is a bigger category than you might think, as it's not reserved just for HPC (high-performance computing) and AI chips, but also entry-level through to high-end desktop and laptop CPUs, semi-custom SoCs for gaming consoles, through to the best data center CPUs and huge AI accelerators using the latest advanced packaging technologies. Wendell Huang, Senior VP and Chief Financial Officer of TSMC, said: "Our business in the third quarter was supported by strong demand for our leading-edge process technologies. Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies".

TSMC's Results Add Another Feather in the Hat of AI Bulls -- What You Need to Know

Shares of TSMC climbed to an all-time high Thursday following the news, before paring the early-session gains. Taiwan Semiconductor Manufacturing Co. (TSM) posted record earnings and lifted its outlook, in what could be taken as another strong signal of AI demand. The world's largest chip manufacturer posted earnings per share of $2.92 on revenue that surged 41% year-over-year to $33.10 billion in the third quarter, topping analysts' estimates compiled by Visible Alpha. TSMC CEO C.C. Wei pointed to "robust" AI-related demand for the growth, telling investors on Thursday's earnings call that "conviction in the AI megatrend is strengthening and we believe that demand for semiconductors will continue to be very fundamental," according to a transcript provided by AlphaSense. TSMC said it sees fourth-quarter revenue of between $32.2 billion and $33.4 billion, and boosted its 2025 revenue growth forecast to the mid-30% range, up from its previous projection of about 30%. Shares of TSMC climbed to a record high Thursday morning following the news before paring their early gains. The stock has added over 50% in 2025 so far.

TSMC stock rises after Q3 profit jumps 39.1% on AI boom - should you invest?

TSMC's profit rose sharply thanks to high demand for AI and 5G chips made for big companies like Nvidia and Apple. The chipmaker is growing fast and plans to invest more in new technology. Experts say AI will keep boosting TSMC's success, making it one of the top tech stocks to watch. Taiwan Semiconductor Manufacturing Company (TSMC) said its profit rose 39.1% in the third quarter compared to last year, according to CNBC. The company did well because more people are buying artificial intelligence (AI) chips, helping it earn more than expected. TSMC's revenue for the September quarter was NT$989.92 billion, which was higher than the expected NT$977.46 billion, according to LSEG SmartEstimates. Its net income was NT$452.3 billion, also beating the expected NT$417.69 billion, as per LSEG SmartEstimates. The company's revenue grew 30.3% compared to the same period last year, and its net income rose 13.7% from the previous quarter, which had already been a record high. TSMC is Asia's biggest technology company by market value, and it makes advanced chips used in AI and 5G technologies. The company produces AI processors for large clients such as Nvidia and Apple, which have played a big role in its revenue growth. TSMC's CEO C.C. Wei said, "Recent developments in the AI market continue to be very positive." He explained that as more consumers use AI models, there is more demand for computing power and semiconductor products. Wei added, "Thus, our conviction in the AI mega trend is strengthening," showing strong confidence in the company's future growth. Because of this AI-driven growth, TSMC has raised its 2025 revenue growth forecast to the mid-30% range, up from around 30% earlier, as per C.C. Wei's statement. TSMC raised its full-year spending plan to $40 billion, up from $38 billion earlier, to expand and upgrade its factories. The high-performance computing (HPC) unit, which makes AI and 5G chips, brought in the most money -- 57% of total sales from July to September. Advanced chips (7-nanometer or smaller) made up 74% of TSMC's chip revenue in the third quarter. Smaller nanometer chips mean faster performance and better power efficiency, which makes them highly valuable for AI and smartphones. According to Counterpoint Research senior analyst William Li, "TSMC's robust earnings are a direct reflection of the strong traction at 3nm as well as high utilization at 4/5nm - both of which are being driven by ongoing orders from AI GPU and HPC customers and premium smartphone platforms." The company also said it is keeping a close watch on U.S. tariff developments, as Taiwan negotiates for lower trade rates and Washington considers new semiconductor duties. Wei mentioned that "there are uncertainties and risks from the potential impact of tariff policies, especially in consumer-related and price-sensitive market segments." He added that TSMC will continue to monitor and plan for any possible impact of tariffs on its business. To reduce risk from tariffs, TSMC is investing heavily in new manufacturing facilities in the U.S., which TSMC is spending a lot on new factories in the U.S. to lower risks from tariffs and spread out production. TSMC's shares in Taiwan have gone up more than 38% this year, showing that investors trust the company's future. According to TipRanks, TSMC shares rose 2.96% on Thursday after the company posted its record profit jump. The rise was mainly driven by strong demand for AI and 5G chips, which continue to be major growth areas. TSMC said its HPC division, which includes AI and advanced data center chips, contributed over 55% of total revenues this quarter. The division's growth came from large orders by clients like Nvidia and Apple, according to TipRanks. The company said AI-driven demand will keep rising, and it also tried to calm investor concerns about the U.S.-China trade tensions. For the third quarter, TSMC's sales grew 30.3% year over year to NT$989.92 billion (about $33.1 billion), higher than analysts' estimates of $32.12 billion, as reported by TipRanks. Its earnings per share came in at NT$17.44 (around $2.92 per ADR unit), which was up 39% year over year, and higher than analysts' expectation of $2.63. In different regions, North America was TSMC's biggest market, giving 76% of its total income in the third quarter. Asia Pacific gave 9%, China 8%, Japan 4%, and Europe, the Middle East, and Africa (EMEA) 3%. TSMC said its 3-nanometer and 5-nanometer chips are still in high demand for AI, data centers, and smartphones. These chips are now TSMC's main growth drivers, supported by global investment in data centers and rising AI chip demand. For the fourth quarter, TSMC expects revenue between $32.2 billion and $33.4 billion, according to TipRanks. It also expects gross margins between 59% and 61%, supported by steady AI chip demand in the coming months. Analysts on Wall Street strongly recommend buying TSMC shares. In the last three months, there were nine Buy ratings and one Hold. The average target price is $310.67, which means the stock could rise about 1.96% from now. These ratings might change soon after the new earnings report, said TipRanks. TSMC's strong third-quarter results, high demand for AI chips, and growing investments make it one of the most popular tech stocks in the world. Even with trade risks, experts think AI and advanced chips will continue to boost TSMC's growth in the future. The company's record results and strong market position have made many investors look at TSMC as a strong long-term investment option. Q1. Why did TSMC's profit rise in Q3 2025? TSMC's profit jumped because of strong global demand for AI and 5G chips from big clients like Nvidia and Apple. Q2. Is TSMC stock a good buy right now? Analysts rate TSMC a Strong Buy, as AI-driven growth and record profits show strong future potential.

TSMC Sees Continued AI Strength

However, investors should expect volatility in the near term as headline risks over tariff and export controls continue. Here's our initial take on Taiwan Semiconductor Manufacturing's (TSM -1.74%) financial report. Key Metrics AI Chip Demand Fuels Record Profit at TSMC Taiwan Semiconductor Manufacturing, or TSMC, generated 989.92 billion New Taiwan dollars ($33.10 billion) in revenue and NT$452.3 billion in net income in the quarter, topping Wall Street expectations and posting new all-time highs. The company is the go-to foundry for the chips powering the AI revolution. CEO C.C. Wei, on a postearnings call with investors, said recent developments in the AI market "continue to be very positive," strengthening the company's conviction surrounding what Wei called "the AI megatrend." High-performance computing, which includes AI-related chips, accounted for 57% of revenue, up from 51% a year ago. Smartphone chips contributed 30% of revenue, while chips for Internet of Things and automotive accounted for 5% each. Customers are paying up for the chips. Gross margin for the quarter came in at 59.5%, up 170 basis points from a year ago, and operating margin of 50.6% was up 310 basis points from the third quarter of 2024. TSMC raised its full-year revenue guidance from up 30% to the mid-30% range, but Wei did say the company is monitoring "uncertainties" surrounding U.S. tariffs and U.S. restrictions on chips bound for China. Immediate Market Reaction TSMC shares opened higher on Thursday before giving back those gains, in step with the broader market. Shares of Taiwan Semiconductor were down about 1.5% in midday trading on Thursday. What to Watch Wei and TSMC see no slowdown in AI demand ahead, but with the stock up nearly 50% already in 2025, investors appear focused as much on the geopolitical risks as they are on the future opportunity. TSMC is investing heavily in the U.S., including new facilities in Arizona, but those investments will take time to translate to the bottom line. The company is also reportedly in talks with Intel (INTC -0.48%) about potential investments and partnerships. Overall, TSMC remains both pushed forward by AI tailwinds and also caught up in macroeconomic uncertainty. The AI strength should prevail over the long term, but investors should expect volatility in the near term as headline risks over tariff and export controls continue to dominate the news cycle.

TSMC expects AI megatrend to strengthen, as profit blows past forecasts

TSMC reported a 39.1% surge in Q3 profit, marking its sixth consecutive quarter of double-digit growth, driven by the AI megatrend. The chip giant forecasts a strong Q4 with revenue up by as much as 24%, anticipating continued robust AI demand and maintaining its significant capital spending plans for 2025. TSMC, the world's biggest producer of advanced AI chips, forecast fourth-quarter revenue up by as much as 24% as it rides an AI boom that saw it post its sixth consecutive quarter of double-digit profit growth, beating estimates. TSMC said it expects robust artificial intelligence demand to continue and maintained its forecast for capital spending at up to $42 billion for 2025, although it flagged a potential business impact from U.S. trade tariffs and currency moves. The Taiwan company, whose customers include Nvidia and Apple, posted a 39.1% jump in third-quarter net profit and said it would be prudent in its business planning going into 2026. Benefiting from surging demand for advanced chips used in AI applications, Taiwan Semiconductor Manufacturing Co said net profit for July-September climbed to T$452.3 billion ($14.76 billion). That was well ahead of a T$417.7 billion LSEG SmartEstimate drawn from 20 analysts. SmartEstimates are weighted toward forecasts from analysts who are more consistently accurate. TSMC said it believes the AI boom is strengthening and demand is stronger than what it had anticipated three months ago as it forecast next year to remain healthy due to robust demand for AI-related products. Trump's trade policies and threats to put tariffs on semiconductors have created uncertainty for the global chip industry and TSMC. TSMC announced plans for a $100 billion U.S. investment with 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. On Wednesday, top semiconductor equipment maker ASML , for which TSMC is a major customer, said third-quarter bookings beat market forecasts but that it expected a significant fall in demand from China next year. Samsung Electronics said on Tuesday it expected its biggest quarterly profit in over three years, also thanks to the AI boom. Taiwan-listed shares in TSMC have risen 38% so far this year, largely brushing off concerns about tariffs, and ahead of the 20% rise for the broader market. ($1 = 30.6450 Taiwan dollars) (Reporting by Wen-Yee Lee, Faith Hung and Ben Blanchard; Editing by Christopher Cushing and Muralikumar Anantharaman)

TSMC Valuation Premium Signals Confidence in AI Boom and Global Chip Dominance | Investing.com UK

Taiwan Semiconductor: AI Demand and Record Profits Push TSMC to New Heights as Global Expansion Reshapes the Chip Industry Taiwan Semiconductor Manufacturing Company (NYSE:TSM) has once again delivered an extraordinary quarter, reaffirming its position as the most vital and influential company in the global semiconductor supply chain. Fueled by unrelenting AI-driven demand, surging orders from technology giants like NVIDIA, Apple, and AMD, and accelerating adoption of advanced manufacturing nodes, TSMC's dominance over the global chip industry has reached historic levels. Its latest results underscore how the company has evolved beyond being a manufacturer -- it is now the backbone of global computing infrastructure. The company reported third-quarter revenue of $23.5 billion, up 34% year-over-year, with net income climbing 42% to $9.7 billion. These results not only surpassed expectations but also reflected the scale of transformation happening across the industry. Gross margins expanded to 55.4%, while operating margins hit 45.1%, driven by better yields from 3-nanometer production and strong mix from AI and high-performance computing (HPC) clients. Management noted that roughly 45% of total wafer revenue now comes from AI and HPC applications, compared with 37% a year earlier -- an indication that the next phase of TSMC's growth is powered almost entirely by artificial intelligence infrastructure. CEO C.C. Wei highlighted during the earnings call that "TSMC remains the manufacturing foundation of the AI era," emphasizing that demand from hyperscale data centers and next-generation accelerators has reached levels the company has never seen before. The firm's 3nm process nodes, powering NVIDIA's new Blackwell GPUs and Apple's M5 chips, are running at full capacity, and the company expects 4nm and 2nm demand to exceed current capacity by the end of 2026. Orders from U.S. cloud leaders such as Amazon Web Services and Google Cloud have also contributed to record utilization rates across its advanced fabs. To support this wave of demand, TSMC reaffirmed a record capital expenditure program of $31 billion for 2025, with over $18 billion dedicated to advanced process expansion. The company is simultaneously ramping construction on new fabrication plants in Arizona, Kumamoto (Japan), and Dresden (Germany) -- each strategically chosen to diversify production and mitigate geopolitical risks. The Arizona plant, now projected to begin partial 3nm output by the first half of 2026, is the centerpiece of TSMC's localization strategy in the West. The Japan joint venture with Sony and Denso will produce both automotive and specialty logic chips, ensuring the company's foothold in high-growth verticals beyond AI. However, expansion comes at a cost. Building and operating fabs outside Taiwan will increase operating expenses by 20-25%, and analysts caution that the company's long-term gross margin target of 53-55% could come under pressure as global labor and infrastructure costs rise. Nevertheless, management remains confident that pricing power and long-term demand will offset those challenges. CFO Wendell Huang reiterated that "profitability remains sustainable as customers are prioritizing performance and efficiency over cost savings." The market continues to reward that confidence. TSMC's stock has surged over 85% year-to-date, recently trading near $178.90, just below its record high of $182.40. The company's market capitalization has crossed $900 billion, making it not only the largest semiconductor manufacturer in Asia but also one of the five most valuable technology firms worldwide. Its forward price-to-earnings ratio of 27 represents a premium to its five-year average (20x), yet remains well below NVIDIA's 54x and ASML's 36x -- suggesting that the market views TSMC as a balanced mix of growth and defensive strength. Institutional interest continues to climb. Goldman Sachs raised its price target to $205, citing "sustained structural demand for advanced node capacity," while Morgan Stanley upgraded TSMC to Overweight with a $210 target, describing it as "the single most indispensable company in the AI supply chain." UBS maintained a Neutral view but acknowledged that TSMC's strategic relevance has insulated it from broader semiconductor cyclicality. On the buy side, several large asset managers -- including Vanguard, BlackRock, and Temasek -- have added to positions in recent months, underscoring growing confidence in its long-term fundamentals. Financially, TSMC remains one of the strongest companies in the world. The firm ended the quarter with $50.6 billion in cash, a debt-to-equity ratio below 0.20, and generated $12.4 billion in free cash flow -- a 68% increase from a year earlier. The company raised its quarterly dividend to NT$4.50 per share (around $0.14) and reaffirmed its payout ratio of 45%, rewarding shareholders while maintaining financial flexibility. Capital efficiency and balance sheet strength remain unmatched among semiconductor peers. Still, TSMC's success doesn't come without challenges. Geopolitical risk remains its largest overhang. With over 60% of total capacity concentrated in Taiwan, concerns persist over supply chain vulnerability in the event of cross-strait tensions. The U.S. and European Union have made significant policy moves to reduce dependence on Taiwan-based manufacturing, but the complexity of TSMC's production ecosystem means true diversification will take years. The company has navigated this with diplomatic precision, balancing customer relationships in both the U.S. and China while maintaining strict compliance with export controls. Another growing theme is sustainability. TSMC's fabs are among the most energy-intensive manufacturing facilities in the world. The company has pledged to reach net-zero emissions by 2050 and has accelerated investment in renewable energy partnerships across Taiwan and Japan. Over 90% of its electricity use is projected to come from renewable sources by 2030, reflecting increasing ESG pressures from global investors and clients alike. From a technical standpoint, TSM stock continues to trade in a strong ascending channel. The 50-day moving average around $165 provides solid support, while the next key resistance remains at $183. Analysts see potential for an extension toward $195-$200 if the next earnings report confirms ongoing AI momentum. Trading volumes have remained robust, with foreign institutional inflows accelerating in the third quarter, particularly from U.S. and Singapore-based funds. For long-term investors, TSMC remains the defining story of the semiconductor age. The company's dominance in advanced node technology, its commanding role in the AI infrastructure buildout, and its unmatched manufacturing expertise have made it the single most critical enabler of global innovation. Yet that dominance also carries heightened expectations. As demand for high-performance computing, autonomous systems, and generative AI continues to scale, TSMC stands at the center of a structural transformation -- one that could define the next decade of global technology. With record profits, strategic diversification, and a near-monopoly on the world's most advanced chips, Taiwan Semiconductor's challenge isn't about growth anymore -- it's about sustaining perfection in an industry where every nanometer counts.

TSMC Raises Revenue View Again Amid Global AI Investment Frenzy -- Update

Taiwan Semiconductor Manufacturing Co. raised its outlook further as profit for the third quarter soared to a record, proving that chip demand for artificial intelligence and high-performance computing remains strong. The improved guidance, with TSMC now expecting mid-30% revenue growth for the year, compared with a roughly 30% rise forecast previously, came despite the world's largest contract chip maker facing U.S. tariff pressure and heightened trade uncertainty. "AI demand is stronger than we thought three months ago" after meeting with clients, Chairman C.C. Wei said in a postearnings call Thursday. The comments follow a series of multibillion-dollar deals ChatGPT developer OpenAI has struck with chip designers, including Nvidia and Advanced Micro Devices, in recent months to expand computing capacity. TSMC, which dominates advanced chip making, is set to be a major beneficiary. In a recent interview with Stratechery, OpenAI Chief Executive Sam Altman said, "I would like TSMC to just build more capacity." Wei said Thursday that TSMC will continue to accelerate its capacity expansion in Arizona to meet U.S. clients' soaring demand, adding that the company is close to securing a second piece of land to scale up its chip-making plants, or fabs, and build a gigafab cluster. The chip maker expects to maintain its momentum, forecasting fourth-quarter revenue of between US$32.2 billion and US$33.4 billion, with its gross profit margin at 59%-61%. For the third quarter, net profit rose 39% from a year earlier to 452.30 billion New Taiwan dollars, equivalent to US$14.77 billion, TSMC said. That far exceeded analysts' expectations and was a 14% improvement on the previous record set in the second quarter. Revenue rose 30% to NT$989.92 billion. The upbeat results followed similar updates from other major technology companies. Dutch tech giant ASML on Wednesday reported better-than-expected orders of its chip-making equipment for the third quarter, while Samsung Electronics, the world's largest memory-chip maker, said Tuesday that it expects its highest quarterly profit in three years. Tariffs remain an overhang for the sector, however. It is still unclear how much U.S. duties will affect the Taiwanese chip maker's business, though company executives have played down the impact. The U.S.'s ambitious plan to bring chip manufacturing back home could also complicate TSMC's outlook. Taiwan currently faces a 20% tariff on U.S.-bound goods while trade negotiations continue. President Trump has also threatened a 100% levy on all chips exported to the U.S., though exemptions would apply to tech companies that commit to manufacturing in America, such as TSMC. Adding to the uncertainty, U.S. Commerce Secretary Howard Lutnick recently proposed splitting semiconductor production 50-50 between Taiwan and the U.S., an idea the island's trade officials have rejected. Analysts said the U.S. proposal could suggest that TSMC's commitments so far aren't enough. The Taiwanese chip giant has already pledged to invest US$165 billion in the U.S. The latest results should reassure investors that while geopolitical noise and higher costs of overseas chip plants still weigh on sentiment, it is less than what we would expect, said Zavier Wong, a market analyst at trading platform eToro.

TSMC Q3 profit expected to set record on AI spending boom

TAIPEI (Reuters) -TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is set to post a 28% jump in third-quarter profit to reach a record high due to surging demand for AI infrastructure, though U.S. tariffs may complicate its outlook. Taiwan Semiconductor Manufacturing Co, the world's biggest contract chipmaker and a key supplier to Nvidia and Apple, is likely to report a net profit of T$415.4 billion ($13.59 billion) for the three months through September 30, showed an LSEG SmartEstimate compiled from 20 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC has already flagged a market-forecast-beating rise in third-quarter revenue of 30%. Any profit result above T$398.3 billion would be the chipmaker's highest-ever and its seventh consecutive quarter of profit growth. TSMC, Asia's most-valuable listed company with a market capitalisation of around $1.2 trillion - nearly three times that of South Korean rival Samsung Electronics - will report financial results on Thursday and provide fourth-quarter guidance in an earnings call scheduled for 0600 GMT. On Wednesday, top semiconductor equipment maker ASML, for whom TSMC is a major customer, said third-quarter bookings beat market forecasts but that it expected a significant fall in demand from China next year. Samsung on Tuesday said it expected its biggest quarterly profit in over three years, also on the AI boom. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are currently subject to a 20% tariff, but that excludes chips. U.S. Secretary of Commerce Howard Lutnick proposed last month that Taiwanese companies split their production of chips 50-50 between Taiwan and the U.S., compared to the current setup where the vast majority of production is on the island. Taiwan has rejected that idea. TSMC is already investing $165 billion building factories in the U.S. in the state of Arizona. Shares in TSMC have gained 36% so far this year on optimism over AI, largely brushing off tariff concerns. The heavyweight's rise has powered the benchmark Taiwanese index's 18% advance over the same period. ($1 = 30.5680 Taiwan dollars) (Reporting by Ben Blanchard; Editing by Christopher Cushing)