tsmc's eps hits record high: chairman wei unveils growth strategy

2025-07-18 tsmc

taipei, Friday, 18 July 2025.
tsmc’s second-quarter earnings call revealed a record nt$15.36 earnings per share. chairman wei c.c. addressed concerns about currency fluctuations and tariffs. he assured investors that tsmc is ready to seize every opportunity for expansion. tsmc is not just navigating challenges; it’s eyeing a future where ai and advanced manufacturing drive unprecedented growth. the company anticipates that the market for robotics could eclipse even that of electric vehicles by a factor of ten.

third-quarter outlook and financial targets

tsmc projects third-quarter revenue between $31.8 billion and $33 billion, marking a 3.774 increase of approximately 5.8% to 9.7% [1]. This growth is fueled by sustained demand for AI and high-performance computing [1]. The company anticipates a gross profit margin ranging from 55.5% to 57.5%, slightly below the previous quarter’s 58.6% but still strong [1]. The operating profit margin is expected to be between 45.5% and 47.5% [1]. These financial targets reflect tsmc’s confidence in its ability to capitalize on market opportunities despite currency and tariff headwinds.

currency impacts and profitability strategies

chairman wei acknowledged that exchange rate volatility poses a structural challenge [1]. However, tsmc aims to maintain a long-term gross margin above 53% through enhanced manufacturing efficiency and product value [1]. Wei emphasized that a 1% increase in productivity could yield $1 billion in benefits for the company [1]. This strategic focus on operational improvements underscores tsmc’s commitment to mitigating external economic pressures and sustaining profitability, which is crucial for investor confidence and stock performance.

revised revenue growth and ai demand

tsmc has revised its full-year revenue growth target to approximately 30%, signaling strong confidence in its market position [1]. Wei emphasized that customer behavior remains consistent, with robust demand for AI technologies driving growth [1]. While the company remains cautiously optimistic about fourth-quarter performance due to tariff uncertainties, its technological leadership and manufacturing prowess position it to capture available opportunities [1]. This upward revision reflects positively on tsmc’s growth trajectory and its ability to meet increasing market demands.

cowos capacity expansion and market dynamics

the surge in AI has led to explosive demand for advanced packaging technologies like cowos [1]. Tsmc is actively expanding cowos capacity to address supply-demand imbalances [1]. Chairman Wei clarified that reports suggesting equilibrium will only be reached by 2026 are misconceptions [1]. This proactive approach to capacity expansion demonstrates tsmc’s responsiveness to market shifts and its commitment to supporting the growth of AI-driven applications, reinforcing its appeal to investors.

nvidia h20 chip and market access

tsmc views the u.s. decision to lift restrictions on nvidia’s h20 chip exports to china positively [1][7]. Wei noted that this development is beneficial for both tsmc and its customers [7]. While refraining from adjusting the annual growth forecast for ai accelerators, currently estimated at 40%, wei remains cautiously optimistic [1]. This cautious yet positive outlook suggests that tsmc is well-positioned to capitalize on opportunities arising from evolving geopolitical landscapes and market access dynamics.

u.s. expansion and advanced manufacturing

tsmc is accelerating the construction of its second arizona-based fab and is considering expediting the launch of a third [1]. The company envisions its u.s. facilities evolving into a mega-foundry hub supporting smartphones, AI, and high-performance computing [1]. With a total investment of $165 billion in the U.S., tsmc plans to establish six advanced wafer manufacturing plants, two advanced packaging facilities, and a large research and development center [5]. This expansion underscores tsmc’s commitment to meeting long-term demand and solidifying its global manufacturing footprint [5].

capital expenditure and strategic investments

tsmc is maintaining its capital expenditure budget between $30 billion and $42 billion for the year [1]. The company emphasizes a prudent investment strategy, avoiding excessive expansion while remaining open to future opportunities [1]. Chairman Wei indicated potential minor upward adjustments to capital expenditure in the coming years [1]. This balanced approach to capital allocation reflects tsmc’s commitment to sustainable growth and maximizing shareholder value, instilling confidence in its long-term financial planning.

robotics market potential

chairman wei highlighted the transformative potential of the robotics market, suggesting it could be ten times larger than the electric vehicle market [1][3]. He noted that humanoid robots require sophisticated integration of hardware and software, including processors and sensors [3]. While still early in development, tsmc anticipates significant demand for ai chips as the robotics industry matures [3]. This forward-looking perspective positions tsmc to capitalize on emerging technological trends and drive future growth in advanced semiconductor solutions.

Bronnen

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