TSMC lifts 2025 outlook on surging Q2 profits
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The news: Taiwan Semiconductor Manufacturing Co (TSMC) lifted its outlook for 2025 after posting a record profit in the second quarter, despite currency pressures and Trump’s tariff uncertainty.
The numbers: The world’s largest semiconductor maker reported an almost 61% year-on-year rise in Q2 profit to USD13.7 billion ($21.2 billion), a record high and above estimates as demand for AI continues to surge.
The company also forecast Q3 revenue to reach between USD31.8-USD33 billion, a 38% year-on-year increase. CEO CC Wei said that the company expects FY25 revenue to increase by around 30%, compared the mid-20% raise previously projected.
However, the company projects a Q3 dip in its gross profit margin, falling to 55.5%-57.5% from 58.6% in Q2. TSMC said that continuing unfavourable exchange rates and a ramp-up in overseas factories will cause the decline.
The context: TSMC's optimistic sales growth forecast underscores expectations that big tech firms will continue spending to build out massive datacentres required for their artificial intelligence projects.
On an earnings call Thursday, Wei said TSMC’s leading chip technologies will continue to support its business, according to the WSJ. Demand for the company’s advanced chips remains robust, he added, and the company is working to “narrow the gap between the demand and the capacity.”
While the impact of any potential US tariffs on TSMC’s business remains unclear at this stage, with Trump having threatened a 32% reciprocal tariff on the country’s goods, Wei said that demand remains strong and that it would face limited impact from tariffs as these would be borne by importers.
Wei also told investors on Thursday that the company plans to bring forward its production timelines for new facilities by several quarters. The company in March announced plans to build a 'gigafab cluster' in Arizona.
What they said: “Our business in the second quarter was supported by continued robust AI and HPC-related demand,” said Wendell Huang, senior VP and CFO of TSMC. “Moving into third quarter 2025, we expect our business to be supported by strong demand for our leading-edge process technologies.”
The sources: TSMC earnings, WSJ, Bloomberg
