tsmc's q1 2025 revenue surges: is ai the secret?

2025-07-08 tsmc

taipei, Tuesday, 8 July 2025.
taiwan semiconductor manufacturing company (tsmc) announced a revenue of 839.25 billion twd for the first quarter of 2025. this represents a 41.61% increase. tsmc’s total revenue for the last twelve months reached 3.14 trillion twd, a 39.86% year-over-year increase. tsmc’s chairman revealed that orders for humanoid robot chips have begun contributing to revenue. analysts are keeping a close watch because morgan stanley expects tsmc’s ai revenue to surge from $26 billion in 2025 to $90 billion by 2029.

financial performance and market reaction

The robust revenue figures underscore TSMC’s dominant position in the global semiconductor market [1]. The company’s revenue per employee is approximately 41,069,552 twd [1]. This financial success translates to substantial employee compensation; in early July 2025, TSMC distributed 2024 performance bonuses averaging over 1.8 million twd (approximately 444,600 rmb) per person [7]. In contrast, Samsung’s foundry division reported zero performance bonuses for the first half of 2025, highlighting the diverging fortunes of these industry competitors [7].

impact of geopolitical factors and us expansion

Morgan Stanley anticipates that TSMC’s commitment to investing in U.S. facilities will likely secure tariff exemptions, mitigating potential risks from proposed semiconductor tariffs [6]. The U.S. ‘big and beautiful act’ is expected to further alleviate cost pressures associated with TSMC’s U.S. expansion by increasing tax credits for semiconductor manufacturers building facilities in the United States to 35% [6]. This governmental support aims to encourage domestic production and reduce reliance on overseas manufacturing [6].

future growth and capacity expansion

Looking ahead, Morgan Stanley forecasts a 20% year-over-year increase in TSMC’s dollar-denominated revenue for 2026, with capital expenditures remaining steady at $40 billion [6]. This growth is expected to be fueled by a 30% to 40% annual increase in cloud AI semiconductor revenue and Intel’s outsourcing of its NovaLake series CPUs and GPUs to TSMC [6]. To meet increasing demand, TSMC is reportedly planning to expand its 2-nanometer monthly production capacity to 90,000 wafers, exceeding earlier projections of 60,000 wafers [6].

revenue forecasts and potential challenges

Despite overall positive projections, there are potential near-term challenges. Morgan Stanley anticipates a modest 3% quarter-over-quarter increase in TSMC’s third-quarter 2025 dollar revenue, attributing this to some demand being pulled forward into the second quarter [6]. Factoring in exchange rates, with an assumed third-quarter exchange rate of 30 twd per usd, TSMC’s third-quarter revenue in twd could decline by 1.6% quarter-over-quarter [6]. Furthermore, the gross margin is projected to decrease by 1.5 percentage points to 55.8%, primarily due to the appreciation of the new taiwan dollar [6].

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