Record-Breaking Earnings Driven by Artificial Intelligence
Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, reported a remarkable
60.7% jump in second-quarter net profit, reaching a historic high as the company benefits from soaring demand for semiconductors used in artificial intelligence applications[1]. For the period between April and June, TSMC's net profit climbed to
T$398.3 billion (approximately $13.53 billion), substantially beating market expectations[1].
Stellar Revenue Growth and Market Performance
- Q2 2025 revenue: $31.93 billion, an increase of 39% year-over-year[3].
- First half 2025 revenue: Gained 40% compared to the previous year[1].
- TSMC shares have risen 5% year-to-date after an 80% surge last year[2].
AI Chips as a Core Growth Engine
TSMC’s growth is tightly linked to its leadership in manufacturing chips for artificial intelligence. High-Performance Computing (HPC), largely AI-related, now accounts for
59% of TSMC’s total sales, and advanced nodes (≤7nm) contribute 73% of revenue[3]. The company’s advanced CoWoS packaging technology—integral for AI accelerators—has become an industry benchmark among leading clients like Nvidia and AMD[3].
Major Clients: Tech Industry Titans
TSMC’s key customers include global leaders such as Apple and Nvidia, who rely on the chipmaker for advanced semiconductors used in AI devices and datacenters[1]. The company stands at the center of the surge in demand triggered by the current AI revolution.
Headwinds: Tariffs and Currency Risks
Despite the record results, TSMC faces significant challenges:
- U.S. tariffs: Ongoing threats of tariffs could disrupt supply chains if not appropriately managed[2][3].
- Currency headwinds: The New Taiwan dollar has appreciated by 7% against the U.S. dollar in 2025, with each 1% appreciation trimming 0.4 percentage points off gross margin[2][3].
In Q2, the company's gross margin dipped due in part to currency effects. Analysts warn that without effective hedging, further currency strengthening could compress margins by up to 3 percentage points[3].
Outlook
TSMC remains optimistic, issuing Q3 guidance anticipating continued robust demand for AI chips and maintaining high gross and operating margin forecasts between 57-59% and 47-49%, respectively[4].
