Taiwan Semiconductor Manufacturing Company (TSMC) has posted an impressive performance in the second quarter, driven by a surge in artificial intelligence demand. The company reported a revenue increase of 38.6% year-on-year, reaching $31.81 billion, with net profits jumping 60.7% to $13.57 billion.
A significant factor in this growth was the sale of advanced 3-7 nanometer semiconductor nodes, which accounted for 74% of the wafer sales. Specifically, 3-nanometer wafers contributed to 24% of quarterly sales, 5-nanometer to 36%, and 7-nanometer to 14%.
CFO Wendell Huang highlighted the “continued robust AI and high-performance computing demand,” while CEO C.C. Wei welcomed Nvidia’s reauthorized shipments to China, calling it positive news for future growth. Despite currency fluctuations, Q2 revenue still climbed 17.8% from the previous quarter.
Looking ahead, TSMC forecasts third-quarter revenues between $31.8 billion and $33 billion, an increase of up to 40% from the previous year. While they anticipate a slight reduction in gross and operating margins, the company has increased its full-year revenue growth outlook to around 30% in U.S. dollar terms. However, they face challenges such as the potential impact of U.S. tariffs and a strong Taiwan dollar by 2025, which could pressure profitability.
TSMC is pressing forward with capital expenditures between $38 and $42 billion and notes that customer demand remains strong. The company’s shares, which soared about 80% last year, have risen modestly amid policy and currency concerns.
As a central figure in the AI supply chain, TSMC’s ability to maintain its leading-edge capacity seems to outweigh broader economic and geopolitical uncertainties for now. The effects of tariffs and exchange rates on TSMC’s margins remain to be seen as we approach 2025.
