【Earnings Highlights and Outlook】
- Q2 2025 revenue reached $30.1 billion, up 17.8% sequentially, exceeding guidance due to strong AI and HPC-related demand.
- Full-year 2025 revenue growth forecast raised to about 30% year-over-year in USD terms.
- Q3 2025 revenue guidance: $31.8-33 billion, representing 38% year-over-year growth at midpoint.
- 2025 capital expenditure maintained at $38-42 billion.

【Q&A Highlights】

Q1: How is the demand outlook for data center AI and advanced packaging?
- AI momentum remains strong and healthy.
- TSMC is working to narrow the gap between demand and supply for advanced packaging capacity.
- Multiple new facilities are being built to increase AI and CoWoS capacity.

Q2: What is the status of N2 development and its profitability compared to N3?
- N2 development is on track for volume production in H2 2025.
- N2 profitability is expected to be better than N3.
- N2 is projected to reach corporate average profitability faster than N3 did.

Q3: How is TSMC addressing the foreign exchange impact on gross margins?
- TSMC focuses on six factors determining profitability, with foreign exchange being one.
- The company aims to leverage other factors like technology leadership and cost reduction to manage through unfavorable exchange rates.
- Long-term gross margin target of 53%+ remains achievable.

Q4: What is the capacity expansion plan for leading-edge nodes?
- TSMC is building multiple fabs in Taiwan and overseas to support strong AI-related demand.
- The company is working to narrow the gap between demand and supply, particularly for 3nm and 2nm nodes.
- Capacity for 5nm is also tight due to ongoing demand from AI products.

Q5: How is TSMC approaching advanced packaging development?
- TSMC is developing various advanced packaging technologies based on customer demands.
- These include system integration, CoWoS, and other solutions aligned with advanced node development.
- The company prioritizes working closely with customers to meet their specific needs.

Q6: What is TSMC's strategy for mature nodes given industry overcapacity?
- TSMC focuses on developing specialty technologies for mature nodes, such as RF, high voltage, and CIS.
- The company builds capacity based on customer demand, not general market conditions.
- New fabs in Japan and Germany are for specialty technologies, indicating continued demand.

Q7: How does TSMC view the potential of humanoid robots as a future driver?
- It's still early to determine the impact of humanoid robots on semiconductor demand.
- Initial applications are expected in the medical industry for elderly care.
- The complexity of humanoid robots requires advanced sensors and CPUs, presenting future opportunities.

Q8: Are customers trying to pull in demand ahead of potential price increases in 2026?
- No significant changes in customer behavior observed so far.
- Long lead times (e.g., 4 months for 3nm) and tight capacity make it difficult for customers to pull in demand.

Q9: What is TSMC's expectation for capital intensity given the strong N2 demand?
- TSMC doesn't set capital intensity as a goal but invests based on future growth opportunities.
- The company expects revenue growth to outpace capital expenditure growth, potentially leading to lower capital intensity.

Q10: How is AI adoption progressing for the most advanced nodes?
- AI customers are moving faster to adopt the latest nodes due to performance and power efficiency demands.
- N2 and A16 offer significant power efficiency improvements, which are crucial for AI data centers.
- TSMC's advanced nodes, including A16, are well-positioned to meet the increasing power efficiency requirements of AI applications.

Disclaimer: This earnings call summary is generated by AI and is for informational purposes only. Due to technical limitations, inaccuracies may exist. It does not constitute investment advice or commitments.