In its earnings report released Thursday, the world’s largest contract chipmaker said net profit surged nearly 61% year-on-year, reaching NT$398.27 billion (approximately $13.5 billion), outperforming market expectations. Revenue for the quarter came in at NT$933.80 billion ($31.7 billion), also ahead of analyst estimates and up 38.65% from the same period last year.
The results were buoyed by a sustained boom in AI chip production. TSMC manufactures cutting-edge processors used by major tech firms such as Nvidia and Apple — companies that are increasingly reliant on the foundry’s advanced fabrication capabilities, particularly its 3-nanometer and 5-nanometer nodes.
C.C. Wei, TSMC’s Chief Executive Officer, emphasized during the company’s earnings call that full-year 2025 revenue is expected to grow around 30% in U.S. dollar terms, reflecting not only momentum from AI but also broader uptake of its advanced chip technologies.
The outlook for the third quarter remains strong, with revenue projected between $31.8 billion and $33.0 billion — a midpoint that suggests 8% growth over Q2 and a 38% increase compared to the same quarter last year.
According to Counterpoint Research’s Brady Wang, TSMC’s success hinges largely on its dominance in advanced nodes under 7 nanometers, which now make up nearly three-quarters of the company’s wafer revenue. “The primary driver of growth for TSMC has been the robust demand for AI-related chips,” Wang said, adding that AI’s expansion across sectors is “highly sustainable in the near term.”
Despite the optimistic earnings and forecasts, TSMC faces a set of external challenges that could complicate its growth trajectory in the coming months.
Among them are evolving U.S. trade policies, particularly under former President Donald Trump, who has floated the possibility of steep “reciprocal tariffs” on Taiwanese goods. Taiwan was hit with 32% tariffs earlier this year, and trade negotiations between Washington and Taipei are ongoing. Additionally, Trump recently suggested he may impose further duties on semiconductor imports, a move that could impact TSMC directly.
The company is also navigating U.S. export controls that limit high-tech chip sales to China — a critical market for TSMC and its clients. However, there are signs of easing tensions: both Nvidia and AMD reported this week that they had received government clearance to resume shipments to Chinese customers.
On the domestic front, analysts caution that TSMC could be exposed to macroeconomic headwinds in the second half of the year. These include a strengthening Taiwan dollar and possible reductions in orders from consumer electronics sectors such as smartphones and PCs, which have seen fluctuating demand amid global economic uncertainty.
Sravan Kundojjala of SemiAnalysis noted, “While TSMC is well-positioned in AI and advanced manufacturing, external risks such as currency fluctuations and geopolitical tensions could weigh on its otherwise strong fundamentals.”
For now, however, the company’s record-setting quarter underscores its pivotal role in the global tech supply chain — and its ability to weather challenges through innovation, scale, and strategic partnerships.