Taiwan Semi rises after Q2 profit surges 60%, raises 2025 outlook

Shares of Taiwan Semiconductor (NYSE:TSM) rose about 4% premarket on Thursday after the global foundry reported record profit in the second quarter with growth of 60%.

TSM — which produces chips for some of the world’s largest tech companies, including Apple (AAPL), Nvidia (NVDA) and AMD (AMD) — saw second quarter 2025 net revenue grow 44.4% year-over-year to $30.07B (NT$933.79B, + 38.6%Y/Y). However, the figures missed analysts’ estimates. Compared to the first quarter of 2025 net revenue rose 17.8% year-over-year, when the company had generated $25.53B.

The company’s net income and diluted EPS both increased 60.7% year-over-year. TSM’s net profit for the second quarter jumped to NT$398.3B (about $13.5B), beating the average estimate of NT$377.9B from LSEG SmartEstimate, as per a Reuters report. The company had generated NT$247.85B in the second quarter of 2024.

“Our business in the second quarter was supported by continued robust AI and HPC [High Performance Computing]-related demand,” said Wendell Huang, Senior vice president and CFO of TSM.

“TSMC beat on the bottom line this time – all thanks to higher than expected gross margin (58.6%), helping to stabilise the EBIT and net income margins as well,” said SA analyst Oakoff Investments, Investing Group Leader for Beyond the Wall Investing.

Q2 Revenue by Technology

TSM said 3nm process technology contributed 24% of total wafer revenue in the second-quarter, versus 15% in the year ago period, and 22% in the first quarter of 2025.

“From the official release we see that their 3mn was ~24% of total wafer revenue, and it’s good considering 3nm only started ramping production relatively recently (late 2022–2023). It indicates stronger orders from Nvidia, AMD, Apple, and others. This is their higher-margin segment and I think it’s going to gain more revenue share in the mix, thus confirming my thesis of a likely offset to their ramping CAPEX. If I had to revisit my rating right away, I’d give TSM a Buy once again,” said Oakoff Investments.

The 5nm process technology accounted for 36% of total wafer revenue, compared to 35% in the same period a year ago, and 36% in the first quarter of 2025. Meanwhile, 7nm accounted for 14% of total wafer revenue in the second quarter versus 17% a year earlier, and 15% in the first quarter of 2025.

Q2 Revenue by Platform

High Performance Computing represented 60% of net revenue, up from 52% in the second quarter of 2024. The company’s smartphone segment represented 22% of net revenue, versus 33% in the year ago period.

Q2 Revenue by Geography

Revenue from China accounted for 9% of the total net revenue in the second quarter of 2025, down from 16% in the year-ago period.

North America accounted for 75% of total net revenue, compared to 65% a year earlier, and 77% in the first quarter of 2025.

Outlook

“Moving into third quarter 2025, we expect our business to be supported by strong demand for our leading-edge process technologies,” said Huang.

For the third quarter of 2025, TSM expects revenue to be between $31.8B and $33B (with midpint at $32.4B).

For 2025, TSM forecast sales growth of about 30% in U.S. dollar terms, up from mid-20% previously, Bloomberg News reported.

The company maintained its plans to spend $38B to $42B upgrading and expanding capacity this year, the report added.