Nvidia and TSMC: what next week's earnings reveal

2025-08-22 general

taipei, Friday, 22 August 2025.
Next week, both Nvidia and TSMC will release their earnings reports. Nvidia recently halted production of its H20 AI chip for China. CEO Jensen Huang is reportedly in talks with the Trump administration about a possible new chip for China. TSMC anticipates a 30% revenue increase in 2025. TSMC’s CEO also noted that a 1% productivity gain through AI equals $1 billion for TSMC. Both companies’ reports are expected to provide key insights into the semiconductor market.

Nvidia’s H20 chip halt and market reaction

Nvidia’s stock recently experienced a dip following reports that it had ceased work on its H20 AI chip intended for the Chinese market [1]. This decision involved halting production with suppliers like Samsung and Amkor [1]. Despite this setback, Wedbush analyst Matt Bryson recently raised Nvidia’s price target, signaling continued confidence in the company’s overall prospects [1]. Nvidia’s CEO, Jensen Huang, is reportedly engaging with the Trump administration regarding the potential development of a new chip tailored for China, indicating the company’s commitment to navigating geopolitical challenges [1].

TSMC’s strong growth and future outlook

TSMC’s Q2 2025 earnings showcased a strong performance, with EPS rising 60.7% year-over-year to NT$15.36 [5]. Revenue also saw an increase of 11.3% sequentially, reaching NT$30.1 billion [5]. The company’s gross margin stood at 58.6%, and the operating margin was 49.6% [5]. TSMC anticipates a substantial 30% revenue increase for the entire year of 2025 [5]. This growth is attributed to robust demand for leading-edge process technologies, particularly in AI and high-performance computing (HPC) [5].

Advanced nodes and capital expenditure

TSMC’s advanced technology nodes, specifically 7nm and below, accounted for 74% of its wafer revenue in Q2 2025, highlighting the company’s focus on cutting-edge technologies [5]. The company is investing heavily in future growth, with capital expenditures for 2025 projected to be between $38 billion and $42 billion [5]. These investments support the development and expansion of advanced manufacturing capabilities, including multiple fabs in Taiwan and the United States [5]. TSMC’s strategy includes developing specialized technologies for mature nodes and expanding facilities in Japan and Germany [5].

Analyst perspectives and market dynamics

Analysts maintain a positive outlook on TSMC, with one article noting that TSMC dominates advanced nodes with 69% revenue share, driven by AI demand [6]. TSMC’s technology leadership and high yields in advanced nodes secure top customers like Nvidia and Apple [6]. Despite potential cost increases from US fab expansions, TSMC can offset these with premium pricing [6]. TSMC’s CEO, C.C. Wei, emphasized the company’s commitment to narrowing the gap between supply and demand, particularly for advanced nodes like N3 and N5 [5].

Implications for investors

Investors should closely monitor Nvidia’s ability to navigate geopolitical challenges and maintain its leadership in AI chips [1]. Nvidia’s price-to-earnings ratio is 56.36 [1]. For TSMC, the focus remains on its capacity to meet the surging demand for advanced nodes and capitalize on AI-driven growth [5]. TSMC’s Q3 2025 revenue is expected to be between $31.8 billion and $33 billion, representing an 8% sequential increase or a 38% year-over-year increase [5]. TSMC’s Q2 2025 earnings beat expectations, with an EPS of $2.47, surpassing the consensus estimate of $2.13 [3].

Bronnen

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