seniorspectrumnewspaper – TSMC posted its strongest quarterly results to date in Q2 2025. As booming demand for AI and high-performance computing (HPC) chips fueled growth. Revenue rose 38.6 percent year-on-year to NT$933.79 billion ($31.81 billion), while net profit jumped 60.7 percent to NT$398.27 billion ($13.57 billion). Diluted earnings reached NT$15.36 per share, equivalent to $2.47 per American depositary receipt.
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The company’s gross margin expanded to 58.6 percent, with an operating margin of 49.6 percent and net margin reaching 42.7 percent—levels rarely seen among global semiconductor firms. Chief Financial Officer Wendell Huang credited strong results to “continued robust AI and high-performance computing demand.” Advanced manufacturing nodes once again played a leading role in the quarter’s success.
Processes at or below 7 nanometers accounted for 74 percent of total wafer revenue. Specifically, 3-nanometer chips made up 24 percent of sales, 5-nanometer chips contributed 36 percent, and 7-nanometer processes added 14 percent. Chief Executive C.C. Wei called Nvidia’s newly reauthorized H20 shipments to China “very positive news,” highlighting their shared position in the AI ecosystem.
TSMC’s quarterly revenue increased 17.8 percent over Q1, despite a stronger Taiwan dollar that typically weighs on export earnings. Management now expects third-quarter revenue to range between $31.8 billion and $33.0 billion, which would mark up to 40 percent year-over-year growth.
Outlook Raised Despite Margin Pressures and Global Uncertainty
While Q2 performance exceeded expectations, TSMC anticipates some pressure on margins going forward. For the third quarter, the company guides gross margins between 55.5 and 57.5 percent and operating margins between 45.5 and 47.5 percent. These declines are expected due to rising operating costs and the strengthening Taiwan dollar.
The full-year revenue forecast has been raised to around 30 percent growth in U.S. dollar terms, a notable upgrade from earlier projections. However, several risks could weigh on future performance. These include potential semiconductor-specific tariffs in the United States, continued currency appreciation, and weaker-than-expected iPhone sales.
Additionally, TSMC is investing heavily in global expansion. It plans to maintain capital expenditures between $38 billion and $42 billion, with major new fabs underway in Arizona and Japan. While these projects will increase long-term capacity, the near-term costs will impact profitability. Despite these challenges, customer demand remains strong, with no signs of a slowdown in orders.
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So far in 2025, TSMC shares have gained just 5 percent after surging roughly 80 percent last year. Investor concerns about policy shifts and foreign exchange volatility have tempered enthusiasm, even as demand for generative AI and advanced chips continues to rise.
As the center of the AI chip supply chain, TSMC remains well-positioned to meet the growing needs of the tech industry. Whether the company can sustain its industry-leading margins amid geopolitical and economic headwinds will become clearer in the quarters ahead.
