TSMC Raises Revenue View Again Amid Global AI Investment Frenzy — Update

By Sherry Qin

Taiwan Semiconductor Manufacturing Co. raised its outlook further as profit for the third quarter soared to a record, proving that chip demand for artificial intelligence and high-performance computing remains strong.

The improved guidance, with TSMC now expecting mid-30% revenue growth for the year, compared with a roughly 30% rise forecast previously, came despite the world's largest contract chip maker facing U.S. tariff pressure and heightened trade uncertainty.

"AI demand is stronger than we thought three months ago" after meeting with clients, Chairman C.C. Wei said in a postearnings call Thursday.

The comments follow a series of multibillion-dollar deals ChatGPT developer OpenAI has struck with chip designers, including Nvidia and Advanced Micro Devices, in recent months to expand computing capacity. TSMC, which dominates advanced chip making, is set to be a major beneficiary.

In a recent interview with Stratechery, OpenAI Chief Executive Sam Altman said, "I would like TSMC to just build more capacity."

Wei said Thursday that TSMC will continue to accelerate its capacity expansion in Arizona to meet U.S. clients' soaring demand, adding that the company is close to securing a second piece of land to scale up its chip-making plants, or fabs, and build a gigafab cluster.

The chip maker expects to maintain its momentum, forecasting fourth-quarter revenue of between US$32.2 billion and US$33.4 billion, with its gross profit margin at 59%-61%.

For the third quarter, net profit rose 39% from a year earlier to 452.30 billion New Taiwan dollars, equivalent to US$14.77 billion, TSMC said. That far exceeded analysts' expectations and was a 14% improvement on the previous record set in the second quarter. Revenue rose 30% to NT$989.92 billion.

The upbeat results followed similar updates from other major technology companies. Dutch tech giant ASML on Wednesday reported better-than-expected orders of its chip-making equipment for the third quarter, while Samsung Electronics, the world's largest memory-chip maker, said Tuesday that it expects its highest quarterly profit in three years.

Tariffs remain an overhang for the sector, however.

It is still unclear how much U.S. duties will affect the Taiwanese chip maker's business, though company executives have played down the impact. The U.S.'s ambitious plan to bring chip manufacturing back home could also complicate TSMC's outlook.

Taiwan currently faces a 20% tariff on U.S.-bound goods while trade negotiations continue. President Trump has also threatened a 100% levy on all chips exported to the U.S., though exemptions would apply to tech companies that commit to manufacturing in America, such as TSMC.

Adding to the uncertainty, U.S. Commerce Secretary Howard Lutnick recently proposed splitting semiconductor production 50-50 between Taiwan and the U.S., an idea the island's trade officials have rejected.

Analysts said the U.S. proposal could suggest that TSMC's commitments so far aren't enough. The Taiwanese chip giant has already pledged to invest US$165 billion in the U.S.

The latest results should reassure investors that while geopolitical noise and higher costs of overseas chip plants still weigh on sentiment, it is less than what we would expect, said Zavier Wong, a market analyst at trading platform eToro.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

October 16, 2025 05:33 ET (09:33 GMT)