Nonetheless, traders ought to count on volatility within the close to time period as headline dangers over tariff and export controls proceed.
This is our preliminary tackle Taiwan Semiconductor Manufacturing‘s (TSM -1.65%) monetary report.
Key Metrics
Metric
Q3 2024
Q3 2025
Change
vs. Expectations
Web income
NT$759.7 billion
NT$989.9 billion
30%
Beat
Earnings per share
NT$12.54
NT$17.44
39%
Beat
Gross margin
57.8%
59.5%
170 bp
n/a
Wafer shipments (thousand 12-inch equiv.)
3,338
4,085
22%
n/a
AI Chip Demand Fuels Document Revenue at TSMC
Taiwan Semiconductor Manufacturing, or TSMC, generated 989.92 billion New Taiwan {dollars} ($33.10 billion) in income and NT$452.3 billion in web earnings within the quarter, topping Wall Road expectations and posting new all-time highs.
The corporate is the go-to foundry for the chips powering the AI revolution. CEO C.C. Wei, on a postearnings name with traders, mentioned current developments within the AI market “proceed to be very optimistic,” strengthening the corporate’s conviction surrounding what Wei known as “the AI megatrend.”
Excessive-performance computing, which incorporates AI-related chips, accounted for 57% of income, up from 51% a 12 months in the past. Smartphone chips contributed 30% of income, whereas chips for Web of Issues and automotive accounted for five% every.
Prospects are paying up for the chips. Gross margin for the quarter got here in at 59.5%, up 170 foundation factors from a 12 months in the past, and working margin of fifty.6% was up 310 foundation factors from the third quarter of 2024.
TSMC raised its full-year income steerage from up 30% to the mid-30% vary, however Wei did say the corporate is monitoring “uncertainties” surrounding U.S. tariffs and U.S. restrictions on chips sure for China.
Rapid Market Response
TSMC shares opened larger on Thursday earlier than giving again these positive aspects, in keeping with the broader market. Shares of Taiwan Semiconductor have been down about 1.5% in noon buying and selling on Thursday.
What to Watch
Wei and TSMC see no slowdown in AI demand forward, however with the top off almost 50% already in 2025, traders seem targeted as a lot on the geopolitical dangers as they’re on the long run alternative. TSMC is investing closely within the U.S., together with new amenities in Arizona, however these investments will take time to translate to the underside line.
The corporate can also be reportedly in talks with Intel (INTC -0.88%) about potential investments and partnerships.
General, TSMC stays each pushed ahead by AI tailwinds and in addition caught up in macroeconomic uncertainty. The AI energy ought to prevail over the long run, however traders ought to count on volatility within the close to time period as headline dangers over tariff and export controls proceed to dominate the information cycle.
Useful Sources
Lou Whiteman has positions in Taiwan Semiconductor Manufacturing. The Motley Idiot has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Idiot recommends the next choices: brief November 2025 $21 places on Intel. The Motley Idiot has a disclosure coverage.
