TSMC(US:TSM) Zheng Quan Shi Bao Wang·2025-10-17 12:00Core Insights - TSMC reported strong financial results for Q3 2025, driven by robust AI demand, with advanced process revenue accounting for over 70% of total wafer revenue [1][2] - The company achieved a record net profit of NT$452.3 billion, a year-on-year increase of 39.1% [1] - TSMC's advanced process revenue breakdown shows 3nm at 23%, 5nm at 37%, and 7nm at 14%, with advanced processes (7nm and below) making up 74% of total revenue [1] Financial Performance - TSMC's consolidated revenue for Q3 was NT$989.92 billion, a 30.3% year-on-year increase and a 6% quarter-on-quarter growth, translating to US$33.1 billion [1] - Gross margin improved to 59.5%, exceeding analyst expectations of 57.1%, while operating margin reached 50.6%, also surpassing market forecasts [1] - For Q4, TSMC forecasts revenue between US$32.2 billion and US$33.4 billion, with a gross margin of 59% to 61% and an operating margin of 49% to 51% [2] Market Segmentation - The HPC platform remains TSMC's largest revenue source, contributing 57% of total revenue, while smartphone revenue grew by 19% to account for 30% [2] - IoT and automotive sectors also saw revenue growth of 20% and 18%, respectively, each representing 5% of total revenue [2] - Declines were noted in the DEC sector, down 20% to 1%, and other sectors down 8% to 2% [2] Advanced Process Development - TSMC is making progress on its 2nm process, expected to enter trial production this quarter, with mass production anticipated in 2026 [3] - The company is also launching the N2P process for enhanced performance and efficiency, alongside the A16 process designed for high-performance computing applications [3] - TSMC's leadership in advanced processes is reinforced by strong demand for AI-related applications, with ongoing efforts to address supply constraints in AI chip manufacturing [3] Capacity Expansion - TSMC is accelerating capacity expansion at its Arizona facility and preparing to upgrade technology for advanced processes [4] - A second plot of land near the existing Arizona plant is being acquired to support expansion plans, while a second wafer fab in Japan is under construction [4] - The company estimates capital expenditures for 2025 to be between US$40 billion and US$42 billion, with approximately 70% allocated to advanced processes [4]