TSMC lifts FY25 revenue forecast amid AI investment frenzy
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The news: Taiwan Semiconductor Manufacturing Co. (TSMC) raised its full-year revenue forecast on Thursday on a bullish outlook for AI spending, after posting a record profit surpassed market estimates.
The numbers: Amid robust artificial intelligence demand, TSMC raised its 2025 revenue guidance to mid-30% growth in US dollar terms from around 30%, and maintained its forecast for capital spending at up to USD42 billion ($64.61 billion) for 2025.
The chip maker expects to maintain its momentum, forecasting fourth-quarter revenue of between USD32.2 billion and USD33.4 billion, with its gross profit margin at 59%-61%.
Net profit rose 39% in Q3 from a year earlier to NT$452.30 billion, TSMC said, far exceeding analysts’ expectations and was a 14% improvement on the previous record set in the second quarter.
The context: The forecast upgrade is another indication that TSMC remains a large beneficiary of the AI spending spree that large tech players have undertaken in recent months, as they race to secure the technology and infrastructure to meet increasing AI demand.
OpenAI and Oracle are among a swathe of industry leaders scrambling to build data centres underpinning AI, inking deals worth tens of billions despite an uncertain geopolitical environment.
What they said: "AI demand actually continues to be very strong - more strong than we thought three months ago," CEO CC Wei told an earnings call. "We are also happy to see continuous strong outlook from our customers," he added.
"In addition, we directly receive very strong signals from our customers' customers requesting the capacity to support their business. Thus, our conviction in the AI megatrend is strengthening," CC Wei added.
Wendell Huang, senior VP and CFO of TSMC said in a statement: “Our business in the third quarter was supported by strong demand for our leading-edge process technologies. Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies.”
