TSMC profit surges 61% to record high fueled by AI chip demand

Taiwan Semiconductor Manufacturing Company on Thursday reported a near 61% year-on-year rise in second-quarter profit, hitting a record high and beating estimates, as demand for artificial intelligence chips stayed strong.

The world’s largest contract chip manufacturer forecast third-quarter revenue between $31.8 billion and $33.0 billion — a 38% year-over-year increase and 8% higher from the prior quarter at the midpoint. 

TSMC CEO C.C. Wei said in the earnings call that the company expects its full-year 2025 revenue to rise by around 30% in U.S. dollar terms, supported by growth in artificial intelligence and demand for its most advanced technologies.

Here are the company’s results versus LSEG SmartEstimates:

• Revenue: 933.80 billion new Taiwan dollars ($31.7 billion), vs. NT$931.24 billion expected
• Net income: NT$398.27 billion, vs. NT$377.86 billion 

TSMC’s net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, also beating estimates.

The company’s shares were up over 4% at 4:30 a.m. ET on trading platform Robinhood.

TSMC’s high-performance computing division, which encompasses artificial intelligence and 5G applications, drove second quarter sales, contributing 60% of revenue. That share of HPC revenue was up from 52% in the same period last year.

TSMC has benefited from the artificial-intelligence megatrend as it manufactures advanced AI processors for clients including Nvidia and Apple.

“The primary driver of growth for TSMC has been the robust demand for AI related chips, particularly for the leading edge nodes below 7nm,” said Brady Wang, associate director at Counterpoint Research.

In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency. TSMC said advanced chips, with sizes 7-nanometer or smaller, accounted for 74% of TSMC’s total wafer revenue in the quarter. 

“Surging demand from the AI boom is highly sustainable in the near term, with AI still in its very beginning stages and continues to expand across industries,” Wang added.

However, the company faces potential headwinds from the trade policy of the U.S. President Donald Trump, who has threatened steep “reciprocal tariffs” on Taiwan.

Taiwan faces 32% tariffs announced in April and is in the midst of trade talks with the U.S., according to local media reports. Trump earlier this month also warned of potential additional tariffs on semiconductors.

“Looking into second half of 2025 we have not seen any change in our customers behavior so far. However, we understand there are uncertainties and risk from the potential impact of tariff policies,” Wei said on Thursday.

U.S. export controls have also restricted TSMC’s business with China, as well as that of its key clients Nvidia and AMD. However, amid a thawing of trade relations between Beijing and Washington, Nvidia and AMD said earlier this week that they had received government assurances allowing them to ship products to China. 

Other headwinds facing TSMC in the second half of the year include appreciation of the Taiwan dollar and potential order cuts from smartphone and PC clients due to global macro conditions, said Sravan Kundojjala, an analyst at SemiAnalysis specializing in global foundries.