Inbizzy, Taipei, Taiwan – Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, has revised its annual revenue growth forecast up to 30% in US dollar terms, driven by booming global demand for artificial intelligence (AI) and high-performance computing (HPC) technologies.
The revised projection surpasses the company’s previous forecast of 25% and beats most industry analyst expectations.
TSMC, a key chip supplier to Nvidia, Apple, AMD, and Qualcomm, reported a staggering 60.7% increase in net profit in Q2 2025, reaching a record NT$398.27 billion (US$13.54 billion), up from NT$247.85 billion in the same period last year.
“The demand for AI is getting stronger and stronger, if you pay attention to what the US$4 trillion company’s CEO said,”- said TSMC Chairman and CEO C.C. Wei, referencing Nvidia CEO Jensen Huang‘s remarks on accelerating AI demand.
Wei emphasized that AI’s growing adoption is translating directly into soaring demand for next-generation semiconductors.
“The explosive growth in token volume demonstrates increasing AI model usage and adoption, which means more and more computation is needed, leading to more leading-edge silicon demand,” he said.
Global AI Growth Strains Chip Supply Chains
TSMC revealed that its 3nm and 5nm chips now account for 60% of total revenue, but the surging demand is creating supply constraints in advanced chip manufacturing and packaging, especially in chip-on-wafer-on-substrate (CoWoS) technology.
“We are working very hard to narrow the gap between demand and supply,” Wei added, noting that 3nm chip supply shortages may persist for years.
China Market Reopens for Nvidia Chips
TSMC is optimistic about the Biden administration’s recent removal of export restrictions on Nvidia’s H20 chips to China, which may further boost semiconductor sales in one of the world’s largest markets.
“We have not received the signal yet. But certainly, this is good news… China is a big market and my customers can still continue to supply the chips to the big market. It’s very positive news for them and in return it’s very positive news for TSMC,” Wei said.
This development is seen as a strategic tailwind for TSMC, given Taiwan’s pivotal role in global chip manufacturing and growing demand from Asia.
Financial Outlook and Currency Risks
For Q3 2025, TSMC expects revenue to reach US$31.8 to US$33 billion, marking a sequential growth of about 8% or 38% year-over-year.
However, the company flagged the appreciating New Taiwan dollar as a challenge, forecasting its value to rise 6.6% against the US dollar, which may reduce gross margins to 55.5-57.5% from 58.6% last quarter.
To mitigate foreign exchange risks, TSMC injected US$10 billion into its subsidiary TSMC Global, reducing its dollar exposure.
Accelerated Chip Fab Expansion in the U.S.
To address sustained U.S. demand, TSMC is accelerating chip production at its Arizona facilities, part of a broader plan to build six advanced chip fabs in the state.
The third fab, currently under construction, will use the 2nm and A16 process technologies, while 3nm and 4nm chips will be manufactured in the first two facilities. This expansion supports America’s reshoring efforts and enhances supply chain resilience.
With surging demand for AI and HPC, TSMC is cementing its position as the undisputed leader in advanced chip manufacturing. As geopolitical tensions ease and the AI revolution continues, Taiwan’s chip giant is well-positioned to drive innovation across global industries.
