Strong earnings driven by AI boom and advanced chip sales
Taiwan Semiconductor Manufacturing Co. (TSMC) posted a 39.1% year-over-year increase in third-quarter profit, beating analyst estimates and setting a new company record. Net income reached NT$452.3 billion ($15.13 billion USD), exceeding expectations of NT$417.69 billion. Revenue also outperformed forecasts, rising 30.3% to NT$989.92 billion ($33.10 billion USD).
The company has benefited heavily from surging demand for artificial intelligence chips, with major clients like Nvidia and AMD fueling growth. “Recent developments in the AI market continue to be very positive,” said TSMC CEO C.C. Wei. “Our conviction in the AI megatrend is strengthening,” he added during Thursday’s earnings call.
AI and HPC drive majority of sales
TSMC’s high-performance computing (HPC) segment, which includes AI and 5G applications, made up 57% of the company’s revenue for the July–September quarter. The strong momentum led TSMC to raise its full-year 2025 revenue growth projection to the mid-30% range, up from July’s 30% estimate.
In addition, the company increased its planned capital expenditure floor from $38 billion to $40 billion for 2025, reflecting robust customer demand and ongoing capacity upgrades.
Advanced chips power revenue surge
Advanced chips measuring 7 nanometers or smaller accounted for 74% of TSMC’s total wafer revenue. Smaller nanometer chips deliver higher processing efficiency and power, making them central to AI and smartphone applications.
“TSMC’s robust earnings are a direct reflection of the strong traction at 3nm as well as high utilization at 4/5nm,” said William Li, senior analyst at Counterpoint Research. These technologies are in high demand for AI GPUs, HPC platforms, and premium smartphones.
Tariff risks remain but U.S. investment continues
While TSMC executives acknowledged ongoing U.S. tariff negotiations, they expect potential exemptions for key products. “There are uncertainties and risks, especially in price-sensitive segments,” said Wei. The company has invested heavily in U.S. manufacturing to reduce exposure, with facilities under construction as part of its international expansion.
Despite global tensions, TSMC stock has surged over 38% in 2025, driven by the AI revolution and its dominant position in the advanced semiconductor space.
