Taiwan Semiconductor Manufacturing Company (TSMC) announced a nearly 61% year-over-year jump in second-quarter profit, reaching a record high and surpassing expectations, fueled by strong demand for artificial intelligence (AI) chips.
TSMC’s net revenue for the quarter rose 38.65% from a year ago to NT$933.80 billion ($31.7 billion), also beating estimates. The company projects third-quarter revenue between $31.8 billion and $33.0 billion, representing a 38% increase year-over-year and an 8% rise from the prior quarter at the midpoint.
TSMC CEO C.C. Wei said on the earnings call that the company expects full-year 2025 revenue to grow about 30% in U.S. dollars, supported by AI expansion and demand for its most advanced technologies.
TSMC’s high-performance computing (HPC) segment, which includes AI and 5G applications, accounted for 60% of second-quarter revenue, up from 52% a year earlier. The company manufactures advanced AI processors for clients like 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 terms, smaller nanometer sizes mean more powerful and efficient chips. Advanced chips of 7-nanometer or smaller made up 74% of TSMC’s 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.
TSMC faces potential challenges from U.S. trade policies, including tariffs announced on Taiwan and threatened additional tariffs on semiconductors by President Trump.
“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.
U.S. export controls have also limited TSMC’s business with China and affected key clients Nvidia and AMD. Still, recent government assurances have allowed Nvidia and AMD to continue shipments to China amid improving trade relations.
Additional risks for TSMC include Taiwan dollar appreciation and possible order reductions from smartphone and PC customers due to global economic conditions, according to SemiAnalysis analyst Sravan Kundojjala.
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