tsmc's rally stalls: can it break through the 1160 yuan barrier?

2025-07-18 tsmc

Taipei, Friday, 18 July 2025.
Despite a positive investor conference, tsmc stock is struggling to overcome resistance at 1160 yuan. A massive 40 billion yuan in sell orders is creating a major obstacle. Investors are eager to break even, contributing to the heavy selling pressure. Analysts are watching closely to see if tsmc can overcome this hurdle. Breaking through this ceiling would signal strong investor confidence. The company’s potential for further gains hinges on this critical level.

Stellar q2 earnings

Taiwan Semiconductor Manufacturing (TSMC) recently announced its second-quarter 2025 financial results, revealing significant growth driven by robust demand for AI chips and high-performance computing (HPC) [4]. The company’s Q2 net profit increased by 60% year-over-year, reaching 398.3 billion new Taiwan dollars [4][6]. This performance surpassed market expectations, with earnings per share (EPS) hitting 15.36 new Taiwan dollars [4]. TSMC’s stellar earnings reflect its pivotal role in the global semiconductor supply chain and its ability to capitalize on the AI boom [6].

adr surge after earnings call

Following the positive earnings announcement, TSMC’s American depositary receipts (ADR) experienced a surge in after-hours trading [4]. The ADRs jumped over 5% in intraday trading and rose 4.26% in pre-market trading, equivalent to a 485.24 dollar increase from the previous day’s close [4]. This surge indicates strong investor confidence in TSMC’s future prospects, fueled by the company’s leading position in advanced chip manufacturing and its ability to meet the growing demand for AI-related technologies [6].

manufacturing capacity and advanced nodes

TSMC’s profitability is significantly boosted by its advanced manufacturing processes [4]. In the second quarter, 3-nanometer process technology accounted for 24% of total wafer revenue, while 5-nanometer technology contributed 36% [4]. Advanced technologies (7-nanometer and below) made up 74% of the company’s total revenue [4]. The company is expanding its manufacturing capacity, including significant investments in the United States, Japan and Germany, to meet the escalating demand from major AI players like Nvidia and AMD [4].

geopolitical considerations and market dynamics

Despite strong financial performance, TSMC faces geopolitical risks and market uncertainties [6]. Tariffs on semiconductors, potentially reintroduced by the U.S. government, could impact TSMC’s shipments and revenue [6]. Currency fluctuations, particularly the appreciation of the New Taiwan dollar, pose challenges to profitability [6]. TSMC’s revenue from North American clients has risen to 75%, while revenue from mainland China has decreased to 9% [4]. This shift highlights the changing dynamics of TSMC’s customer base amid geopolitical tensions [alert! ‘the source does not explicitly link the revenue shift to geopolitical tensions, but it is implied’] [4].

revised annual revenue growth forecast

Given its strong performance in the first half of 2025, TSMC has revised its full-year revenue growth forecast upward [8]. The company now anticipates revenue growth exceeding 20% for the year [4]. This optimistic outlook is supported by the continued expansion of AI and HPC applications, which are driving demand for TSMC’s advanced chip manufacturing capabilities [6]. Market analysts anticipate that TSMC’s revenue will continue to reach new peaks in the coming quarters, solidifying its position as a market leader [4].

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tsmc stock selling pressure