Strong demand for AI chips, TSMC's Q2 revenue surged by 38.6%, net profit skyrocketed by 61%, exceeding expectations | Earnings Report Insights

The world's largest chip foundry, Taiwan Semiconductor Manufacturing Company (TSMC), reported record highs in both revenue and net profit for the second quarter, with net profit surging 61%, exceeding analysts' expectations and further confirming the strong momentum of global AI spending.

On Thursday, the 17th, TSMC announced its second-quarter performance.

• Revenue reached NT$933.79 billion, a year-on-year increase of 38.6%.
• Net profit was NT$398.3 billion, a surge of 61%, with market estimates at NT$376.42 billion.
• Diluted earnings per share were NT$15.36.
• TSMC's total capital expenditure for the first half of 2025 is projected to be US$19.69 billion.

Based on the current strong order demand, TSMC's management remains optimistic about future growth prospects. The company expects sales to achieve moderate growth of over 20% in 2025.

Revenue Growth Hits Recent Highs

TSMC's second-quarter revenue performance exceeded market expectations, growing 38.6% year-on-year to NT$933.79 billion, and increasing 11.3% quarter-on-quarter. The revenue growth in US dollars was even more significant, up 44.4% year-on-year to US$30.07 billion, and up 17.8% quarter-on-quarter.

Net profit growth was even more remarkable, reaching NT$398.27 billion, with year-on-year and quarter-on-quarter increases of 60.7% and 10.2%, respectively. Diluted earnings per share were NT$15.36, equivalent to US$2.47 per American Depositary Share unit.

All of the company's profitability metrics remained at high levels, with a gross margin of 58.6%, an operating profit margin of 49.6%, and a net profit margin of 42.7%, reflecting TSMC's pricing power and cost control capabilities in advanced process technology.

Advanced Processes Dominate Revenue

TSMC's advanced process technology continues to solidify its market leadership. In the second quarter, advanced processes of 7nm and below accounted for 74% of total wafer revenue, further increasing from the previous quarter.

Among these, the most advanced 3nm process accounted for 24% of total wafer revenue, the 5nm process accounted for 36%, and the 7nm process accounted for 14%. The combined share of the 3nm and 5nm processes reached 60%, indicating strong ongoing demand from customers for the latest generation of chip technology.

The high proportion of advanced processes not only supports TSMC's revenue growth but also brings higher profit margins to the company. These processes are primarily used to produce high-value-added products such as artificial intelligence chips, high-end smartphone processors, and data center chips.

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