Taiwan Semiconductor Manufacturing (TSMC) has reported a significant surge in profits, driven by strong demand for AI chips. The world's largest contract chip manufacturer saw a 60.7% year-on-year increase in net profit, reaching NT$398.27 billion (US$13.52 billion) for the second quarter of 2025. Revenue also jumped 38.6% to NT$933.79 billion, exceeding market expectations. This growth is primarily attributed to the robust demand for TSMC's 3nm and 5nm technologies, crucial for advanced AI processors.
Despite the strong performance, TSMC anticipates potential challenges in the fourth quarter of 2025 due to uncertainties surrounding trade tariffs and a strong Taiwan dollar. These factors could impact margins, with gross margin expected to fall to between 55.5% and 57.5% in the third quarter. Increased investment in overseas operations, particularly in the US and Japan, also contributes to margin pressure. However, TSMC has raised its full-year revenue growth forecast to around 30% in US dollar terms, signalling confidence in continued AI-driven demand.
TSMC's CEO, C.C. Wei, remains optimistic about the sustained demand for AI chips, offsetting concerns about weaker sales in smartphone and IoT chips. The company's significant investments in US manufacturing, including multiple fabs and a research and development centre in Arizona, demonstrate its commitment to meeting the growing global demand for advanced semiconductors.
