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TSMC's profit soars as AI chips boom globally
The Taiwan-based company, which manufactures a large portion of the world's semiconductors, saw booming profit and revenue in its most recent earnings report.
Taiwan Semiconductor Manufacturing Co. reported a huge spike in profits Thursday after releasing its second-quarter earnings, boasting a 38% year-on-year revenue gain thanks to skyrocketing global AI chip demand.
TSMC is the world's largest contract chip manufacturer, providing cutting-edge semiconductors for Nvidia, AMD and Intel, among others.
"It's certainly not surprising," said Matt Kimball, an analyst for data center compute and storage at Moor Insights & Strategy, in an email interview. "This kind of growth is in line with what we are seeing in this AI infrastructure explosion."
TSMC CEO C.C. Wei said the uptick in earnings comes as global demand drives growth for artificial intelligence, and added that he expects the trend to continue, despite increasing tariffs from the U.S.
"Moving into the second quarter, we expect our business to be supported by strong growth of our 3-nanometer and 5-nanometer technologies," he said during an earnings call. "We understand there are uncertainties and risks from the potential impact of tariff policies."
So far, fears of tariff impacts have not materialized or slowed customer demand, Wei said. With the U.S. allowing more TSMC products -- designed by Nvidia and AMD -- to be shipped to China, the company stands to profit from even greater demand.
"I believe AI is pretty much tariff-proof," Kimball said.
AI revolution marches on
Wei also touted the company's $165 billion investment plans in the U.S., which include six total manufacturing operations or fabs. Those will include three advanced semiconductor fabs, three advanced wafer fabs, two advanced packaging fabs, and a major research and development center to be built in Arizona. He said when the fabs are finished, they will account for around 30% of the company's most advanced chipmaking capacity.
"Nvidia and AMD can't make chips fast enough to meet the demand," Kimball said. "Qualcomm is seeing a big ramp in its data center chip business, and companies like Broadcom and Marvell are building the interconnects that move data across systems and networks. TSMC is building all of these infrastructures."
Kimball said while AI is clearly driving TSMC's profit surge, the demand is not only for chips.
"Let's not overlook modernization efforts that are taking place in support of AI across the enterprise -- not just training, but also the agentic-infused workflows that will drive automation."
TSMC's AI charge is led by its high-performance computing division, providing 60% of revenue for the quarter.
"TSMC announced sub-7 [nanometer] manufacturing as accounting for 74% of its volume," Kimball said. "This puts a big exclamation point on the fact that the company is busy fulfilling the needs of these modern designs centered around AI and high-performance computing."
Shane Snider, a veteran journalist with more than 20 years of experience, covers IT infrastructure at Informa TechTarget.
