TLDR
- TSMC reported Q2 revenue of $30.17 billion, up 46% year-over-year and beating analyst expectations of $29.78 billion
- June sales hit $8.9 billion, surpassing estimates of $8.51 billion with 26.9% year-over-year growth
- Strong demand from AI chip customers like Nvidia and Apple continues to fuel growth
- CEO C.C. Wei maintains 2025 sales growth target in mid-20% range for US dollar terms
- Stock hit record high of $237.58 on July 3, with continued momentum in premarket trading
Taiwan Semiconductor Manufacturing Company delivered impressive second-quarter results that underscore the continued strength of AI-driven demand. The world’s largest contract chipmaker reported revenue of $30.17 billion for Q2, representing a 46% jump from the same period last year.
The results easily beat analyst expectations of $29.78 billion. June alone brought in $8.9 billion in sales, topping estimates of $8.51 billion with year-over-year growth of 26.9% in local currency.
TSMC’s success stems from its position as the go-to manufacturer for cutting-edge chips. The company produces semiconductors for major tech players including Nvidia, Apple, AMD, and Broadcom.
The AI revolution continues to be a major growth driver. Data centers running artificial intelligence applications require the advanced chips that TSMC specializes in making. This demand has helped offset any weakness in traditional mobile and consumer segments.
Market Response Shows Confidence
TSM stock responded positively to the strong numbers. Shares advanced more than 1% to $234.43 in premarket trading following the announcement. The stock recently hit a record high of $237.58 on July 3.
Investors have been rewarding AI-linked companies after a period of uncertainty. Earlier concerns about spending levels on data centers have given way to renewed enthusiasm for the infrastructure companies that make AI possible.
The stock broke out of a cup-with-handle base at a buy point of $196.22 on May 22. This technical breakout has led to continued gains as fundamentals support the upward momentum.
Guidance Remains Strong
CEO C.C. Wei has maintained an optimistic outlook for the company’s future. In June, he reassured shareholders that AI chip demand still exceeds supply across the industry.
The company reaffirmed its 2025 sales growth target in the mid-20% range when measured in US dollar terms. This guidance reflects management’s confidence in sustained AI spending.
TSMC has committed to major capacity expansion plans. The company pledged to spend $100 billion ramping up manufacturing in Arizona. Additional expansion projects are underway in Japan and Germany.
Bloomberg Intelligence analyst Charles Shum noted that TSMC likely hit the high end of its $29.2 billion second-quarter sales guidance. The strong performance was driven by AI demand from key customers and rising outsourcing orders from Intel.
However, operating margins are expected to land near the 47% low-end of guidance. The weakening US dollar has impacted profitability despite strong sales growth.
While Nvidia provides significant growth, TSMC still depends on Apple and smartphone manufacturers for the majority of its business. This diversification helps provide stability even as AI demand fluctuates.
The Trump administration’s trade policies continue to create uncertainty for the global electronics sector. Economists have scaled back GDP growth forecasts worldwide, which could impact demand for everything from iPhones to computing equipment.
TSMC is scheduled to report full second-quarter results on July 17, when investors will get more details about the company’s performance and future outlook.
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