The Taiwan Semiconductor Manufacturing Company (TSMC) has expressed strong confidence in the demand for artificial intelligence (AI) chips, reporting impressive financial results for the third quarter. The company announced a net profit of NT$452.3 billion (approximately $14.8 billion), marking a significant 39 percent increase compared to the same period last year. In addition, TSMC’s revenue rose by 6 percent from the previous quarter to NT$989.9 billion, prompting the firm to raise its sales forecast for 2025 to the mid-30 percent range.
CC Wei, the chair and chief executive, emphasized the robust demand for AI, stating it was “stronger than we thought three months ago.” He reassured investors that TSMC feels “very comfortable” about the ongoing demand for leading-edge semiconductors.
Over the past year, TSMC’s shares have surged more than 40 percent, driven by a growing need for high-performance chips as technology companies strive to advance their AI infrastructure. TSMC, which produces over 90 percent of the most advanced chips globally, has maintained a firm lead over competitors such as Samsung and Intel, supplying major clients including Nvidia, AMD, Broadcom, and Apple.
Despite its success, the company noted that the costs associated with its overseas expansion have adversely impacted its gross margin, which was reported at 59.5 percent. Nevertheless, the figure surpassed their high-end expectations for the quarter, largely due to a more favorable exchange rate, as TSMC’s revenues are primarily dollar-based and had been influenced by the Taiwanese dollar’s earlier appreciation.
As part of its growth strategy, TSMC is heavily investing in the United States and is set to begin mass production of advanced chips in Arizona this year. This aligns with efforts from the U.S. government, particularly during the Trump administration, to lessen reliance on foreign tech supply chains. Recently, the administration acquired a 10 percent stake in the struggling chipmaker Intel.
Complications have arisen regarding tariffs, as the U.S. has enforced a 20 percent tariff rate on imports from Taiwan, while excluding chips from this levy. Additionally, recent discussions by U.S. Commerce Secretary Howard Lutnick proposed a division of chip production between Taiwan and the U.S., which has been met with resistance from Taiwan’s vice-premier. Currently, the overwhelming majority of chip production remains concentrated in Taiwan.
