Taiwan Semiconductor’s Profit Rises 61% On Strong A.I. Chip Demand
Taiwan Semiconductor Manufacturing Co. (TSM) has reported a 61% year-over-year increase in its second-quarter profit as demand for artificial intelligence (A.I.) microchips accelerates.
The Q2 profit was a record for the Taiwanese company and beat analysts’ estimates.
The world’s largest contract chip manufacturer, TSMC as the company is known, reported revenue of 933.80 billion new Taiwan dollars ($31.7 billion U.S.), which topped the NT$931.24 billion that had been expected.
Net income in the April through June quarter totaled NT$398.27 billion, which topped the NT$377.86 billion that was anticipated on Wall Street.
TSMC’s sales were up 38.65% from a year earlier.
Looking ahead, the company forecast revenue in the current third quarter of between $31.8 billion U.S. and $33 billion U.S., a 38% year-over-year increase.
TSMC executives said in their earnings call that the company expects its full-year 2025 revenue to rise by about 30% in U.S. dollar terms.
Management stressed that growth in artificial intelligence and demand for its most advanced technologies continues to surge.
TSMC’s high-performance computing division, which encompasses A.I. and 5G applications, drove second quarter sales, contributing 60% of the company’s revenue.
TSMC has benefited from strong demand as it manufactures advanced A.I. processors for clients such as Nvidia (NVDA) and Apple (AAPL), among many other technology giants.
Despite its ongoing success, TSMC faces headwinds from the trade policies of U.S. President Donald Trump, who has threatened steep “reciprocal tariffs” on Taiwan.
Taiwan had 32% tariffs imposed on it by the U.S. in April of this year and is engaged in trade talks with America, according to media reports.
U.S. export controls have also restricted TSMC’s business in mainland China, as well as that of key clients such as Nvidia, although there are signs that those curbs are now being lifted.
Other issues facing TSMC include appreciation of the Taiwan dollar and potential order cuts from smartphone and computer makers due to deteriorating economic conditions.
TSM stock has gained 18% this year to trade at $237.56 U.S. per share.
