TradingKey - TSMC (TSM) delivered a stellar Q2 2025 performance, with both revenue and profits exceeding market expectations.

Q2 revenue reached NT$933.8 billion (US$319.5 billion), a year-over-year (YoY) increase of 38.6%, significantly surpassing market estimates of NT$927.8 billion and the company’s prior guidance of $28.4–29.2 billion. Compared to Q1 2025, revenue grew 11.3%. 

Net profit soared 60.7% YoY to NT$398.3 billion, with a 10.2% QoQ increase. Key metrics, including gross margin (58.6%), operating profit margin (49.6%), and net profit margin (42.7%), remained at elevated levels, underscoring the pricing power of its advanced processes and strong cost management capabilities.

Advanced processes at 7nm and below accounted for 74% of wafer revenue, with 3nm contributing 24%, 5nm 36%, and 7nm 14% (3nm/5nm combined: 60%). These cutting-edge technologies primarily serve high-value sectors such as AI accelerators and high-performance computing (HPC) chips, with clients including NVIDIA, AMD, and other industry leaders.

However, TSMC faces potential challenges from U.S. President Donald Trump’s trade policies. Local media reports indicate Trump has threatened to impose steep "reciprocal tariffs" on Taiwan, including a 32% tariff announced in April, while ongoing trade negotiations continue.

Separately, TSMC confirmed plans to proceed with expansion projects in Japan and Germany, alongside its $100 billion investment commitment in Arizona.

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