Taiwan’s TSMC, the largest semiconductor manufacturer globally, has announced financial results for the second quarter that exceeded analysts’ expectations, bolstering confidence in the sustained global investment in artificial intelligence and confirming the company’s crucial role in this sector.
According to the company’s announcement, profits surged by 61% to NT$398 billion (approximately USD 13.5 billion), surpassing analyst projections of NT$377.8 billion.
Revenue increased by 38.6%, reaching NT$933.8 billion (around USD 31.7 billion), which also exceeded analysts’ expectations of NT$931.2 billion.
The world’s leading contract chip manufacturer, TSMC, projected a nearly 30% growth in sales in USD terms for the current year, revised up from an earlier estimate in the mid-20% range.
For the third quarter, TSMC anticipates sales to range between USD 31.8 billion and USD 33 billion, exceeding previous forecasts.
TSMC has significantly benefited from the growing trend towards artificial intelligence, supplying sophisticated AI processors to companies like Apple and NVIDIA.
In the semiconductor industry, smaller nanometer sizes indicate tighter transistor designs, resulting in greater processing power and efficiency. TSMC noted that advanced chips with sizes of 7 nanometers or less constituted 74% of total chip revenues for the second quarter.
However, the Taiwanese company faces challenges from policies enacted during former President Donald Trump’s administration, which threatened retaliatory tariffs against Taiwan.
Taiwan is subject to tariffs of approximately 32% announced in April and is currently engaged in trade discussions with the U.S. Earlier this month, Trump warned of potential additional tariffs on semiconductors.
The company’s CFO, Wendell Huang, stated that, despite these challenges, TSMC is unlikely to see a significant reduction in capital expenditures in the coming years, maintaining a capital spending forecast of around USD 42 billion for this year.
The company’s results revealed that high-performance computing (HPC) chips, including AI chips, account for 60% of total sales, with the United States contributing 75% of the company’s revenue. The HPC sector recorded a quarterly growth of 14%. CEO C.C. Wei mentioned that the demand for artificial intelligence is “growing stronger every day” and that the demand for N5 chips, which include NVIDIA’s leading AI chips (N4), remains “extremely strong.” Wei also confirmed that production capacity for 3 nanometer and 5 nanometer chips will remain limited due to the use of some AI products utilizing 4 nanometer technology.