By Jordan Grim
Taiwan Semiconductor Manufacturing Co. (TSMC stock) soared after reporting a 39.1% rise in third-quarter profits, exceeding analysts’ expectations and setting a fresh record. Revenue hit NT$989.92 billion ($33.1B), compared with the NT$977.46 billion forecast by LSEG SmartEstimates, while net income climbed to NT$452.3 billion, beating the estimated NT$417.69 billion.
The surge reflects TSMC’s pivotal role in the artificial intelligence megatrend, supplying advanced AI processors for major clients like Nvidia and Apple.
TSMC’s high-performance computing division, covering AI and 5G applications, accounted for 57% of third-quarter revenue. Advanced chips measuring 7 nanometers or smaller made up 74% of total wafer revenue, underscoring the company’s focus on high-efficiency, high-power semiconductors.
“AI adoption by consumers is increasing compute demand, which strengthens our conviction in the AI megatrend,” said TSMC CEO C.C. Wei on the earnings call.
Thanks to AI-driven growth, TSMC raised its 2025 revenue growth forecast to mid-30%, up from a prior estimate of 30%. The company also increased its capacity expansion budget to $40 billion for the year, supporting production of cutting-edge chips for high-demand applications.
“Robust earnings reflect strong traction at 3nm nodes and high utilization at 4/5nm nodes,” noted William Li, senior analyst at Counterpoint Research, pointing to TSMC’s AI GPU and HPC orders as key revenue drivers.
TSMC executives highlighted potential risks from U.S. tariffs but noted that Taiwan may secure lower reciprocal rates, and the company could receive exemptions for certain semiconductor exports. Ongoing investments in U.S. facilities aim to mitigate exposure to trade-related impacts while supporting long-term growth.
TSMC stock has climbed over 38% in Taiwan this year, reflecting investor confidence in its AI-driven product lineup and expansion strategy. With high-performance AI chips fueling revenue, analysts see TSMC continuing to lead the semiconductor sector through 2025 and beyond.