tsmc poised to announce record profits amid ai boom

2025-07-16 tsmc

taipei, Wednesday, 16 July 2025.
taiwan semiconductor manufacturing company is set to reveal unprecedented profits for the second quarter of 2025. analysts predict a 53% surge in net profit, reaching $12.91 billion, fueled by soaring demand for advanced chips and efficient production. this surge highlights tsmc’s dominance in chip manufacturing, with revenue expected to jump 39% to $31.77 billion. investors are keen to see how this impacts tsmc’s stock amid concerns about currency fluctuations and potential tariff headwinds.

financial analysts weigh in

The anticipated earnings release on Thursday has drawn considerable attention from financial analysts [1][6]. Citi analysts suggest that TSMC’s leading-edge technology is crucial for advanced chips, providing a buffer against tariff uncertainties, as the company does not directly ship to the U.S. [1]. Morgan Stanley has set a high target price of NT$1,288 for TSMC, with Goldman Sachs and Macquarie following suit, setting their targets at NT$1,210 and NT$1,282, respectively [3]. These projections reflect confidence in TSMC’s capacity to leverage the escalating demand for AI-related semiconductors [4].

manufacturing capacity and expansion

TSMC’s capital expenditure for 2025 remains between $38 billion and $42 billion, with approximately 70% allocated to advanced process technologies and 10% to advanced packaging [4]. This investment underscores TSMC’s commitment to expanding its manufacturing capabilities to meet the growing demand for AI chips [4]. The company’s global production sites and technological leadership are expected to mitigate concerns related to foreign exchange [1]. Arisa Liu from the Taiwan Institute of Economic Research believes that TSMC’s expanding production in the U.S. and leading chip technology will cushion the impact of forex fluctuations [1].

geopolitical and economic factors

Despite positive projections, TSMC faces potential headwinds from geopolitical tensions and economic factors [5]. U.S. tariff policies and the appreciation of the New Taiwan dollar against the U.S. dollar could impact the company’s financial outlook [1]. TSMC previously indicated that its operating profit margin might decrease by 0.4 percentage points for every 1% depreciation of the U.S. dollar against the New Taiwan dollar [1]. Rong Hui-KY’s Chairman, Liu Shi-lin, noted that external variables like tariffs and exchange rate fluctuations have significantly affected global industrial chains, though recent variables have gradually eased [3].

ai demand as key driver

TSMC’s revenue growth is significantly influenced by the increasing demand for AI-related chips [4]. The company anticipates that AI accelerator chip sales will double in 2025, achieving a 45% compound annual growth rate (CAGR) from 2024 to 2029 [4]. High-performance computing (HPC), driven by AI accelerator orders from companies like NVIDIA and AMD, accounted for 59% of TSMC’s revenue in the first quarter of 2025, growing 7% quarter-over-quarter [4]. Analysts emphasize that the demand for advanced semiconductors, particularly those used in AI applications, is substantially boosting TSMC’s earnings [4].

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