Taiwan Semiconductor Manufacturing Company (TSMC) reported a net profit of NT$398.3 billion (≈ $13.5 billion) in Q2 2025, marking a 61% year-on-year increase—its highest quarterly result to date. In U.S. dollar terms, that equates to approximately $12.8 billion, a 60.7% increase
Revenue trends:
- Sales rose 39% in NT$ and 44% in USD to $30.07 billion, fueled by surging demand for 3 nm, 5 nm, and 7 nm chips used in AI and high-performance computing
- Advanced nodes comprised 74% of wafer revenue, with 3 nm alone representing 24%
- AI/HPC products accounted for approximately 60% of total revenue
Balancing Gains with Headwinds
1. Currency Effects
The Taiwan dollar’s 12% appreciation this year negatively impacted margins—each 1% gains in NT$ shaved off ~0.4 percentage points of gross margin Financial Times
2. Tariff Uncertainty
U.S. tariff concerns persist as a political backdrop, though semiconductors remain exempt for now. TSMC acknowledged potential demand impact due to higher prices
3. Margin outlook
Q2 gross margin stood at 58.6%, expected to decline to 55.5–57.5% in Q3, pressured by forex, new U.S./Japan fabs, and normalizing expenses
Bullish Forward Outlook
- Revenue guidance: TSMC forecasts $31.8–33 billion for Q3 (+38% YoY) and 30% full-year growth in USD, up from mid-20% projections
- Capital investment: $165 billion earmarked for global fab expansions—including U.S. 2 nm production by 2028—underscoring long-term AI leadership
Broader Implications
- AI’s central role: Continued dominance of AI-driven chip demand reinforces TSMC’s position as the global semiconductor fulcrum.
- Market confidence: Shares surged ~4% premarket, hitting record highs, with analysts maintaining bullish outlooks
- Global strategy: Heavy overseas investments position TSMC to avoid tariff risks and secure supply chain resilience.
✅ Conclusion
TSMC’s $12.8 billion Q2 profit, a 61% rise year-over-year, cements its dominance amid an AI chip boom. With robust revenue guidance, heavy investment in fabs, and capacity to weather currency and tariff challenges, the company remains a cornerstone of the global tech ecosystem.
