TSMC Reports Record Q2 Net Profit as AI Chip Demand Soars

Taiwan Semiconductor Manufacturing Co. reported record second-quarter net profit as AI chip demand surged, but warned that potential U.S. tariffs and a stronger Taiwan dollar could hurt future margins.

TSMC’s April-June net profit jumped 60.7% year-on-year to NT$398.3 billion (US$13.5 billion). The result beat the NT$377.9 billion consensus estimate from LSEG SmartEstimate and marked the company’s fifth consecutive quarter of double-digit growth.

The profit surge was driven by surging demand for AI and high-performance computing chips. CEO C.C. Wei said during a press briefing in Taipei that the company was seeing rising orders for AI-optimized semiconductors.

Wei forecast third-quarter sales could rise up to 40% and raised the full-year revenue outlook to around 30% growth in U.S. dollar terms. The previous projection was “close to the mid-20s.”

TSMC expects third-quarter gross margin to narrow to between 55.5% and 57.5%, down from 58.6% in Q2. The company cited a 12% year-to-date appreciation of the Taiwan dollar against the U.S. dollar and higher spending to ramp up factories in the United States and Japan. Wei also welcomed the U.S. decision to let Nvidia resume sales of its H20 AI chip to China.

“China is a big market, and my customer can continue to supply the chip to the big market, and it’s very positive news for them and in return it’s very positive news for TSMC,” Wei said.

The company maintained its full-year capital expenditure plan at US$38-42 billion. Chief Financial Officer Wendell Huang told investors it was very unlikely such spending would suddenly drop going forward.

TSMC has pledged over US$165 billion to expand manufacturing capacity in the United States, including a US$100 billion investment announced in March with President Trump and US$65 billion for Arizona plants, one of which is already operational.