tsmc exits six-inch wafer business amid ai boom

2025-08-14 tsmc

Taipei, Thursday, 14 August 2025.
Taiwan Semiconductor Manufacturing Co. will phase out six-inch wafer production in the next two years. The decision aligns with a shifting market and TSMC’s focus on advanced technologies. The company anticipates a 30% revenue increase this year, fueled by demand for AI chips. The move allows resources to be directed towards more profitable and cutting-edge processes like 3nm and 2nm. This shift may impact smaller clients, but TSMC is working to ensure a smooth transition. Observers expect a positive long-term impact on TSMC’s stock as operations streamline.

stock market reaction

Following the announcement, TSMC’s stock (TSM:NYSE) closed at $241.44 on August 13, 2025, a decrease of 1.17% [1]. Despite this slight dip, the stock has shown a year-to-date increase of 22.25% [1]. The company’s strategic shift is viewed as a move to optimize operations and enhance profitability by focusing on advanced technologies [3]. Market analysts believe concentrating on leading-edge processes will solidify TSMC’s market leadership and drive long-term growth, particularly in the burgeoning AI sector [3][5].

capacity and strategic shift

TSMC’s decision involves phasing out its six-inch wafer facility, which currently accounts for less than 0.5% of its total revenue [3]. The facility has a monthly capacity of approximately 83,000 wafers [3]. The company plans to transition some of the six-inch orders to its twelve-inch lines and its subsidiary, World Advanced, will absorb others [3]. This restructuring aligns with TSMC’s broader strategy of prioritizing advanced processes like 3nm and 2nm, essential for AI chips and high-performance computing [3].

geopolitical considerations

Geopolitical tensions add complexity to TSMC’s strategic decisions. Concerns have arisen regarding potential U.S. tariffs on imported semiconductors and the impact of U.S. investment policies on Taiwan’s economy [3]. A representative from China’s Taiwan Affairs Office voiced concerns that increased U.S. investments in semiconductor manufacturing could weaken Taiwan’s economic autonomy [3]. These geopolitical factors underscore the challenges TSMC faces as it balances global expansion with regional economic and political considerations [3].

financial metrics and future outlook

TSMC’s financial health remains strong, with an EPS (TTM) of $9.65 and a P/E ratio of 25.03 [1]. The company’s EBITDA (TTM) stands at $78.844 billion, and it boasts a high ROE (TTM) of 34.87% [1]. TSMC’s revenue (TTM) is $113.688 billion, with a gross margin of 58.58% and a net margin of 42.86% [1]. These metrics reflect TSMC’s operational efficiency and profitability, supporting its strategic shift towards advanced technologies and AI-driven growth [1][7]. The company’s next earnings date is estimated for October 16, 2025 [1].

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