AI demand confidence receives strong support! Taiwan Semiconductor's Q2 profit reaches a record high of $13.5 billion, raising the full-year revenue guidance

According to Zhitong Finance APP, Taiwan Semiconductor Manufacturing Company (TSMC.US), the world's largest chip foundry, raised its revenue growth forecast for 2025 on Thursday, providing a strong boost to investor confidence amid the ongoing global artificial intelligence (AI) investment boom.

The chip manufacturing giant has adjusted its sales growth forecast in US dollars for this year from the previous mid-range of 20% to approximately 30%. It also expects strong revenue growth in the third quarter, with a range of $31.8 billion to $33 billion, significantly up from $23.5 billion in the same period last year and $30 billion in the previous quarter. This adjustment further reinforces market expectations that tech giants, from Meta (META.US) to Google (GOOGL.US), will continue to invest in data center construction to support AI development. As a result, Nasdaq index futures surged, and TSMC's US stock rose over 4% in pre-market trading.

This adjustment by TSMC highlights that the strong demand for high-end chips from clients such as NVIDIA (NVDA.US) and AMD (AMD.US) has exceeded its current production capacity. CEO C.C. Wei clearly stated at the June shareholder meeting that AI-related orders remain robust, aiming to dispel market concerns about potential spending cuts by tech companies.

Billy Leung, an investment strategist at Global X ETFs in Sydney, analyzed, "This provides strong support for the AI value chain, and market optimism about AI remains solid. For investors, TSMC's performance has alleviated concerns about a slowdown in AI development. Profit margins remain stable, and the demand outlook is positive, overall reinforcing the judgment that AI infrastructure construction is still progressing steadily."

"TSMC's growth engine mainly comes from the strong demand for AI-related chips, especially advanced processes below 7 nanometers," said Brady Wang, Deputy Director of Counterpoint Research. "The demand growth driven by the AI wave is highly sustainable, and AI is still in its early development stage, accelerating its penetration into various industries."

As investors regain confidence in AI-related companies, the shadow of skepticism regarding the necessity of massive investments in data centers by companies like Amazon (AMZN.US), triggered by Deepseek, has gradually dissipated. Last week, NVIDIA became the first company in history to surpass a market capitalization of $4 trillion, highlighting renewed enthusiasm from investors for key AI infrastructure companies like TSMC.

C.C. Wei clarified to reporters that this upward outlook adjustment is unrelated to the news that the US is preparing to approve NVIDIA's export of H20 AI chips to China. He added that while the recovery in sales is beneficial for the industry, it is still too early to quantify the impact.

On the eve of TSMC's earnings announcement, chip equipment supplier ASML (ASML.US) caused market turbulence by lowering its growth forecast for 2026, leading to a more than 11% drop in its stock price. CEO Christophe Fouquet attributed the "increasing uncertainty" to geopolitical and global economic factors Wei Zhejia admitted on Thursday that the tariff policy led by the Trump administration has brought uncertainty, while the appreciation of the New Taiwan Dollar has also put pressure on financial conditions. "Looking ahead to the second half of the year, we have not yet observed any changes in customer behavior," he stated, "but we are aware of the uncertainty and risks brought by potential tariffs."

Sravan Kundojjala, an analyst at semiconductor industry analysis firm SemiAnalysis, pointed out that although U.S. export controls have eased (NVIDIA and AMD have been approved to resume sales to China), the overall business environment still has variables.

This outlook adjustment is based on TSMC's net profit in the second quarter soaring 61% to a record NT$398.3 billion (approximately $13.5 billion), with quarterly performance exceeding market expectations since 2021. Previously, the company's revenue had achieved a strong growth of 39%.

It is noteworthy that the high-performance computing business, which includes server and data center chips, now contributes 60% of the company's revenue, marking its successful strategic transformation from a smartphone market leader to AI chip-driven. As a major chip supplier for Apple (AAPL.US), TSMC maintains its capital expenditure plan of $38 billion to $42 billion for this year and continues to advance its $100 billion capacity expansion projects in Arizona, Japan, Germany, and Taiwan