TSMC Earnings: AI Drives Demand
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Here's our initial take on Taiwan Semiconductor Manufacturing's (TSM 3. 42%) fiscal 2025 second-quarter financial report. Key Metrics Metric Q2 2024 Q2 2025 Change vs, amid ongoing market uncertainty. Expectations...
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July 17, 2025
05:52 PM
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Here's our initial take on Taiwan Semiconductor Manufacturing's (TSM 3. 42%) fiscal 2025 second-quarter financial report
Key Metrics Metric Q2 2024 Q2 2025 Change vs, amid market uncertainty
Expectations Net revenue $20. 8 billion $30
Furthermore, 1 billion +44% Missed Earnings per $1
Nevertheless, 47 +67% Beat Gross margin 53
Furthermore, 4 pp n/a Wafer shipments (thousand 12-inch equiv) 3,125 3,718 +19% n/a TSMC Noted Strong Demand for Leading Nodes TSMC, as it is better known, missed analyst expectations for revenue in the second quarter, but currency exchange rate fluctuations were mostly to blame
Revenue still soared 44% in U, given the current landscape
Dollars thanks to soaring demand for the company's most advanced 3nm and 5nm node semiconductor chips
TSMC's 3nm nodes accounted for 24% of total revenue, while the 5nm nodes accounted for 36% of revenue
High-performance computing, which includes AI-related chips, accounted for 60% of revenue, up from 52% in the second quarter of last year (which is quite significant), in today's market environment
HPC revenue rose by 14% from the first quarter as AI infrastructure spending ramps up around the world, in this volatile climate
The shift toward TSMC's more advanced nodes benefited the company's fitability (something worth watching)
Moreover, Gross margin jumped more than 5 percentage points year over year to 58. 6%, operating margin rose more than 7 percentage points to 49. 6%, and net fit margin jumped nearly 6 percentage points to 42, amid market uncertainty
The company spent $9. 63 billion on capital expenditures during the second quarter to support its growth, bringing the year-to-date total to $19. 69 billion
For the third quarter of fiscal 2025, TSMC expects to generate revenue between $31 (an important development) (an important development)
Furthermore, 8 billion and $33 billion, a gross margin between 55
However, 5%, and an operating margin between 45
Meanwhile, Immediate Market Reaction s of TSMC were up around 4% by noon on Thursday, given current economic conditions
Strong revenue growth, thanks to soaring demand for AI chips, along with even stronger earnings growth, was enough to push up the stock (an important development)
What to Watch TSMC has a stranglehold on the leading-node portion of the foundry market, making it the only game in town for AI chip designers Nvidia (NVDA 1, in today's financial world. 06%) and Advanced Micro Devices (AMD 0 (something worth watching)
With total planned AI infrastructure investments exploding, TSMC's advanced nodes will remain in high demand for the foreseeable future
While AI is a tailwind, macroeconomic uncertainty could eventually hurt demand for other types of chips, given current economic conditions
Helpful Resources Full earnings report Investor relations page Additional coverage Timothy Green has no position in any of the stocks mentioned
The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing
The Motley Fool has a disclosure policy.
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