TSMC Earnings Jump 39% to Beat Estimates and Hit Record AI Demand

Taiwan Semiconductor Manufacturing Co. On Thursday it reported a 39.1% increase in third-quarter profit from a year ago, beating estimates and hitting a new record, as demand for artificial intelligence chips remained strong.

Here are the company’s results against LSEG SmartEstimates:

• Revenue: 989.92 billion New Taiwan dollars ($33.10 billion) vs. NT$977.46 billion expected.
• Net income: NT$452.3 billion, up from NT$417.69 billion

TSMC’s revenue in the September quarter rose 30.3% from a year earlier to NT$989.92 billion, also beating estimates. Net income increased 13.7% from the last quarter, which had been a record at the time.

As Asia’s largest technology company by market capitalization, TSMC has benefited from the rise of artificial intelligence, producing advanced AI processors for customers such as Nvidia and Apple.

“Recent developments in the AI ​​market remain very positive,” TSMC CEO CC Wei said in an earnings call, adding that growing consumer adoption of AI models has led to increased demand for computing products and, by extension, semiconductors. “This strengthens our conviction in the AI ​​megatrend,” he added.

Bolstered by this AI strength, Wei said the company had raised its 2025 revenue growth forecast to the mid-30% range. In July, the company expected full-year revenue growth of around 30%.

TSMC also raised its expected floor for capacity expansion and upgrades to $40 billion for the full year, up from a previous floor of $38 billion.

TSMC’s high-performance computing division, which covers artificial intelligence and 5G applications, accounted for the majority of sales in the July-September quarter and accounted for 57% of revenue.

TSMC said advanced chips, with sizes of 7 nanometers or smaller, accounted for 74% of TSMC’s total wafer revenue in the quarter.

In semiconductor technology, smaller nanometer sizes mean more compact transistor designs, leading to greater processing power and efficiency.

Growth in TSMC’s more advanced chips particularly boosted revenue gains in the third quarter, according to William Li, senior analyst at Counterpoint Research.

“TSMC’s strong earnings are a direct reflection of strong traction in 3nm as well as high utilization in 4/5nm, both of which are driven by continued customer orders for AI and HPC GPUs and premium smartphone platforms,” ​​Li told CNBC in a statement.

TSMC executives also said Thursday they were monitoring developments in U.S. tariffs as Taiwan negotiates a lower “reciprocal” rate and Washington weighs industry-specific tariffs on semiconductors. However, TSMC is likely to receive some exemptions.

“We understand that there are uncertainties and risks from the potential impact of tariff policies, especially in consumer-related and price-sensitive market segments,” Wei said, adding that the company would continue to monitor and plan for any impacts.

TSMC has been investing heavily in U.S. facilities, spending that could help reduce its exposure to tariff impacts.

TSMC shares in Taiwan are up more than 38% so far this year.