TSMC Q2 profit soars 61% to record high; sees AI demand offsetting forex headwinds

Taiwan Semiconductor Manufacturing Corp (TSMC) clocked a sharp rise in its second-quarter net profit on Thursday, beating market expectations as the chipmaker continued to benefit from robust artificial intelligence demand.

CEO C.C. Wei said that he saw few chances of AI-driven demand slowing in the coming months. But Wei flagged some caution over the fourth quarter of 2025, stemming from uncertainty over the impact of trade tariffs.

TSMC’s (TW:2330) (NYSE:TSM) net income rose 60.7% to T$398.27 billion ($13.52 billion) in the three months to June 30. The print was higher than Reuters expectations of T$377.4 billion, and translated to earnings per share of T$15.36 ($2.47 per American Depository Receipt).

Revenue jumped 38.6% to T$933.79 billion, the company said in a statement.

The robust print was driven chiefly by strong AI-fueled demand for TSMC’s 3 nanometer and 5nm wafer technology, which is a key component of advanced AI processors.

This helped offset a smaller revenue contribution from smartphone and device chip sales, as well as increased foreign exchange headwinds.

Taiwan dollar strength hits margins, but impact to be limited

TSMC’s gross margin shrank 5.4% year-on-year to 58.6%, largely due to pressure from a stronger Taiwan dollar. CFO Wendell Huang, speaking in a post-earnings call, forecast current quarter gross margin between 55.5% and 57.5%.

Huang said sustained strength in the Taiwan dollar, along with increased spending on its overseas operations– specifically the U.S. and Japan– were the main drivers of margin pressure.