TSMC hits yet another record as profit surges 39%, beating estimates on AI chip demand surge

Taiwan Semiconductor Manufacturing Company on Thursday reported a 39.1% increase in third-quarter profit from last year, beating estimates and hitting a fresh record as demand for artificial intelligence chips stayed strong.

Here are the company's results versus LSEG SmartEstimates:

• Revenue: NT$989.92 billion new Taiwan dollars, vs. NT$977.46 billion expected
• Net income: NT$452.3 billion, vs. NT$417.69 billion

TSMC's revenue in the September quarter rose 30.3% from a year ago to NT$989.92 billion, also beating estimates. Quarter over quarter, net income increased 13.6%, marking its second consecutive quarter of profit growth.

As Asia's largest technology company by market capitalization, TSMC has benefited from the artificial-intelligence boom, producing advanced AI processors for clients such as Nvidia and Apple.

"Recent developments in AI market continue to be very positive," TSMC CEO C.C. Wei said in an earnings call, adding that increasing adoption of AI models by consumers has led to more demand for compute, and by extension, semiconductor products.

Bolstered by this growth, Wei said that the company had raised its 2025 revenue growth forecast to the mid-30% range. In July, the company had expected full-year revenue growth of about 30%.

In the July-September quarter, TSMC's high-performance computing division, which encompasses artificial intelligence and 5G applications, made up the majority of third-quarter sales, accounting for 57% of revenues.

TSMC said advanced chips, with sizes 7-nanometer or smaller, accounted for 74% of TSMC's total wafer revenue in the quarter.

In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency.

Growth in TSMC's most advanced chips particularly drove revenue gains in the third quarter, according to Counterpoint Research senior analyst William Li.

"TSMC's robust earnings are a direct reflection of the strong traction at 3nm as well as high utilization at 4/5nm – both of which are being driven by ongoing orders from AI GPU and HPC customers and premium smartphone platforms," Li told CNBC in a statement.

TSMC executives also said Thursday that they were monitoring U.S. tariff developments as Taiwan negotiates for a lower "reciprocal" rate and Washington weighs industry-specific duties on semiconductors. However, TSMC is likely to receive some exemptions.

"We understand there are uncertainties and risks from the potential impact of tariff policies, especially in consumer-related and price-sensitive market segments," Wei said, adding that the company would continue to monitor and plan for any impact.

TSMC has been investing heavily in facilities in the U.S. — spending that could help reduce its exposure to tariff impacts.