To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Core Insights - Taiwan Semiconductor Manufacturing reported a record quarterly net profit that significantly exceeded expectations [1] Financial Performance - The company achieved a record quarterly net profit, indicating strong financial health and operational efficiency [1] Market Expectations - The reported profit surpassed market expectations, suggesting positive investor sentiment and confidence in the company's future performance [1]

Group 1 - Charles Schwab Corp. is expected to report quarterly earnings of $1.25 per share on revenue of $5.99 billion [2] - J B Hunt Transport Services Inc. reported quarterly earnings of $1.76 per share, exceeding the consensus estimate of $1.47, with revenue of $3.05 billion, beating the Street estimate of $3.02 billion [2] - Travelers Companies Inc. is anticipated to post quarterly earnings of $6.29 per share on revenue of $11.81 billion [2] - Taiwan Semiconductor Manufacturing Company Ltd. reported a 39.1% increase in profit for the third quarter, surpassing market expectations [2] - US Bancorp is expected to report quarterly earnings of $1.13 per share on revenue of $7.16 billion [2]

Financial Highlights - Third quarter revenue increased 10.1% sequentially to $33.1 billion, slightly above guidance, driven by strong demand for leading-edge process technologies [3][11] - Gross margin rose 0.9 percentage points sequentially to 59.5%, primarily due to cost improvements and higher capacity utilization [3][7] - Operating margin increased 1.0 percentage point sequentially to 50.6% [3] - EPS was TWD 17.44, up 39% year-over-year, with ROE at 37.8% [3] - Cash and marketable securities totaled TWD 2.8 trillion ($90 billion) at the end of the quarter [4] Business Line Performance - 3 nm process technology contributed 23% of wafer revenue, while 5 nm and 7 nm accounted for 37% and 14% respectively [4] - Revenue from the smartphone segment increased 19% to account for 30% of total revenue, while IoT and automotive segments grew by 20% and 18% respectively [4] - Data Center Equipment (DCE) revenue decreased by 20% to account for 1% of total revenue [4] Market Data - The company expects fourth quarter revenue to be between $32.2 billion and $33.4 billion, representing a 1% sequential decrease or a 22% year-over-year increase at the midpoint [6][7] - Full-year 2025 revenue is expected to increase by close to mid-30% year-over-year in U.S. dollar terms [11] Company Strategy and Industry Competition - TSMC is focusing on maintaining technology leadership and manufacturing excellence while investing in advanced process technologies to support AI-related demand [9][12] - The company is narrowing its 2025 CapEx range to $40 billion to $42 billion, with 70% allocated for advanced process technologies [10] - TSMC is expanding its global manufacturing footprint, including capacity expansion in Arizona and Japan, to meet strong multi-year AI-related demand [17][18] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about AI-related demand, expecting it to continue driving growth [11][13] - There are uncertainties regarding tariff policies that could impact consumer-related markets, but management is focused on technology leadership and customer trust [12] - The company is preparing for a structural increase in long-term market demand, particularly in AI applications [15] Other Important Information - TSMC's advanced packaging revenue is approaching 10% of total revenue, highlighting its importance in the competitive landscape [102] - The company is working closely with customers to ensure capacity meets demand, particularly in the AI sector [15][16] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand continues to be strong, with expectations for growth rates potentially exceeding previous mid-40% CAGR forecasts [26][27] Question: CapEx Outlook - Management indicated that CapEx will correlate with business opportunities, and they expect to continue investing to support growth [29][30] Question: CoWoS Capacity - Management is working to narrow the gap between demand and supply for CoWoS capacity, with updates expected next year [32] Question: Advanced Packaging Expansion - TSMC is building two advanced packaging fabs in Arizona and collaborating with partners to meet customer needs [75] Question: Revenue Growth Drivers - Growth is expected to be driven by technology migration, ASP increases, and volume growth [76][78] Question: AI Data Center Capacity - Management noted that 1 GW of AI data center capacity could require significant investment, but specific wafer demand figures are not yet available [89] Question: Competition and Strategic Initiatives - TSMC is focusing on system performance and advanced packaging to strengthen its competitive position in the Foundry 2.0 landscape [102] Question: Concerns about Prebuilt Inventory - Management expressed no concerns about prebuilt inventory levels, indicating they are at healthy seasonal levels [105]

Financial Highlights - In Q3 2025, revenue increased by 6% sequentially in NT and by 10.1% in USD to $33.1 billion, slightly exceeding guidance [5][6] - Gross margin rose by 0.9 percentage points sequentially to 59.5%, driven by cost improvements and higher capacity utilization [6][12] - Operating margin increased by 1.0 percentage point sequentially to 50.6% [6] - EPS was up 39% year over year, and ROE was 37.8% [6] Business Line Performance - Three nanometer process technology contributed 23% of wafer revenue, while five nanometer and seven nanometer accounted for 37% and 14% respectively [7] - Advanced technologies (seven nanometer and below) made up 74% of wafer revenue [7] - Revenue contribution by platform: HPC remained flat at 57%, smartphone increased by 19% to 30%, IoT grew by 20% to 5%, automotive rose by 18% to 5%, while DCE decreased by 20% to 1% [7][8] Market Data - Cash and marketable securities at the end of Q3 were NT2.8 trillion (approximately $90 billion) [8] - Current liabilities decreased by NT101 billion quarter over quarter, mainly due to a reduction in accrued liabilities [8] Company Strategy and Industry Competition - TSMC is narrowing its 2025 CapEx guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [14] - The company aims to leverage its manufacturing technology leadership and large-scale production to remain the most efficient and cost-effective manufacturer [13] - TSMC is expanding its global manufacturing footprint, with significant investments in Arizona, Japan, and Europe to meet strong AI-related demand [22][24] Management Commentary on Operating Environment and Future Outlook - Management expects continued strong demand for leading-edge process technologies, particularly in AI, with full-year 2025 revenue projected to increase by close to mid-thirties percent year over year in USD terms [16][17] - There are uncertainties regarding tariff policies that could impact consumer-related markets, but TSMC remains focused on technology leadership and customer trust [17][20] - The company is preparing for a structural increase in long-term market demand, particularly in AI applications, and is employing a disciplined capacity planning process [20][21] Other Important Information - TSMC's two nanometer technology is on track for volume production later this quarter, with expectations for a faster ramp in 2026 [25][26] - The company is also introducing N2P as an extension of its N2 family, with volume production scheduled for the second half of 2026 [26] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand continues to be strong, with expectations for growth rates potentially exceeding previous mid-forties CAGR guidance [34][35] Question: CapEx Outlook - Management indicated that CapEx will correlate with growth opportunities, and while it is unlikely to drop significantly, it may increase in response to strong demand [38][40] Question: AI Infrastructure and Token Growth - Management acknowledged that token growth is expected to be exponential, and TSMC's technology will enable customers to handle increased demand effectively [78][84] Question: Competition and Strategic Initiatives - TSMC is focusing on Foundry 2.0 to enhance system performance and is working closely with customers to maintain competitive advantages [112][113] Question: Smartphone Demand and Prebuild Concerns - Management expressed no concerns about prebuild inventory levels, indicating that they are currently healthy and at seasonal levels [117]

Financial Highlights - Third quarter revenue increased 10.1% sequentially to $33.1 billion, slightly exceeding guidance, driven by strong demand for leading-edge process technologies [3][10] - Gross margin rose 0.9 percentage points sequentially to 59.5%, attributed to cost improvements and higher capacity utilization, despite foreign exchange challenges [3][6] - Operating margin increased 1.0 percentage point sequentially to 50.6% [3] - Earnings per share (EPS) was 17.44 NT, up 39% year over year, with a return on equity (ROE) of 37.8% [3] Business Line Performance - Revenue contribution from 3-nanometer process technology was 23%, while 5-nanometer and 7-nanometer accounted for 37% and 14% respectively [4] - High-Performance Computing (HPC) remained flat at 57% of revenue, while smartphone revenue increased 19% to 30%, IoT grew 20% to 5%, and automotive rose 18% to 5% [4] - Data Center Equipment (DCE) revenue decreased 20% to 1% [4] Market Data - The company ended the third quarter with cash and marketable securities of 2.8 trillion NT ($90 billion) [4] - Current liabilities decreased by 101 billion NT, mainly due to a reduction in accrued liabilities [4] Company Strategy and Industry Competition - TSMC is narrowing its 2025 capital expenditures (CAPEX) guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [9] - The company expects gross margin dilution from overseas fabs to be between 1% to 2% for the full year 2025, improved from previous estimates [7] - TSMC aims to leverage its manufacturing technology leadership and large-scale production to remain competitive [8] Management Commentary on Operating Environment and Future Outlook - Management noted strong AI-related demand and a mild recovery in non-AI segments, projecting full-year 2025 revenue growth of close to mid-30% year over year in U.S. dollar terms [10][11] - The company remains cautious about potential tariff impacts on consumer-related markets but is committed to investing in future megatrends [11] - TSMC is focused on technology leadership, manufacturing excellence, and customer trust to strengthen its competitive position [11] Other Important Information - TSMC is expanding its global manufacturing footprint, with significant progress in Arizona and plans for additional fabs in Japan and Germany [16][17] - The company is preparing for the ramp-up of its 2-nanometer technology, with volume production expected later this quarter [18] Q&A Session Summary Question: AI Demand Growth - Management confirmed that AI demand is stronger than previously anticipated, with an expected CAGR in the mid-40% range for AI accelerators [21][24] Question: CAPEX Outlook - Management indicated that CAPEX will correlate with business opportunities, and they will continue to invest as long as growth opportunities exist [26][27] Question: CoWoS Capacity - Management is working to increase CoWoS capacity to meet demand but did not provide specific numbers for 2026 [30] Question: Competition and Foundry 2.0 - TSMC is focusing on system performance and advanced packaging as part of its Foundry 2.0 strategy to enhance competitiveness [74][76] Question: Smartphone Prebuilt Concerns - Management expressed no concerns about prebuilt inventory levels, indicating they are healthy and seasonal [79]

Financial Highlights - In Q3 2025, revenue increased by 10.1% sequentially to $33.1 billion, slightly exceeding guidance [6][10] - Gross margin rose by 0.9 percentage points sequentially to 59.5%, driven by cost improvements and higher capacity utilization [6][11] - Operating margin increased by 1.0 percentage point sequentially to 50.6% [6] - EPS was up 39% year-over-year, and ROE stood at 37.8% [6] Business Line Performance - Three nanometer process technology contributed 23% of wafer revenue, while five nanometer and seven nanometer accounted for 37% and 14% respectively [7] - Advanced technologies (seven nanometer and below) represented 74% of wafer revenue [7] - Revenue from the smartphone segment increased by 19% to account for 30% of total revenue [7] - HPC remained flat at 57%, while IoT and automotive segments grew by 20% and 18% respectively [7] Market Data - Cash and marketable securities totaled NT$2.8 trillion (approximately $90 billion) at the end of Q3 2025 [8] - Current liabilities decreased by NT$101 billion quarter-over-quarter [8] - Accounts receivable turnover days increased by 2 days to 25 days, while days of inventory decreased by 2 days to 74 days [8] Company Strategy and Industry Competition - TSMC plans to narrow its 2025 CapEx guidance to between $40 billion and $42 billion, with 70% allocated for advanced process technologies [13][14] - The company aims to leverage its manufacturing technology leadership and large-scale production to remain competitive [12][13] - TSMC is expanding its global manufacturing footprint, including capacity expansions in Arizona, Japan, and Germany [21][24] Management Commentary on Operating Environment and Future Outlook - Management noted strong demand for leading-edge process technologies, particularly in AI-related markets [15][16] - The company expects full-year 2025 revenue to increase by close to mid-30s percent year-over-year [16] - Management remains cautious about potential impacts from tariff policies and is focused on maintaining technology leadership and customer trust [17][18] Other Important Information - TSMC's two nanometer technology is on track for volume production later this quarter, with expectations for a faster ramp in 2026 [26] - The company is also introducing N2P technology, which offers further performance benefits [26] Q&A Session Summary Question: AI Demand and Growth Forecast - Management confirmed that AI demand is stronger than previously anticipated, with an updated CAGR expected to be better than mid-40s [35] - They emphasized that CapEx will correlate with business opportunities, and growth in revenue should outpace CapEx growth [37] Question: Capacity Expansion Plans - Management indicated that they are working hard to narrow the gap between demand and supply, with plans to increase capacity in 2026 [42] Question: Advanced Packaging and Revenue Drivers - Management stated that growth will be driven by a combination of technology migration, ASP increases, and volume growth [84] Question: Competition and Strategic Initiatives - TSMC is focusing on a holistic approach to system performance, integrating front-end and back-end processes to enhance competitiveness [99] Question: Concerns about Prebuild Inventory - Management expressed no concerns about prebuild inventory levels, noting that inventory is at healthy seasonal levels [101]

Financial Performance - TSMC's net revenue reached US$33.10 billion in 3Q25, a 10.1% increase compared to 2Q25 and a 40.8% increase compared to 3Q24 [6] - Net revenue in NT$ was NT$989.92 billion in 3Q25, up 6.0% from NT$933.79 billion in 2Q25 and up 30.3% from NT$759.69 billion in 3Q24 [6] - Gross margin was 59.5% in 3Q25, a 0.9 percentage point increase from 2Q25 and a 1.7 percentage point increase from 3Q24 [6] - Operating margin was 50.6% in 3Q25, a 1.0 percentage point increase from 2Q25 and a 3.1 percentage point increase from 3Q24 [6] - Net income attributable to shareholders of the parent company was NT$452.30 billion in 3Q25, up 13.6% from NT$398.27 billion in 2Q25 and up 39.1% from NT$325.26 billion in 3Q24 [6] - EPS (Earnings Per Share) was NT$17.44 in 3Q25, up 13.6% from NT$15.36 in 2Q25 and up 39.0% from NT$12.54 in 3Q24 [6] - ROE (Return on Equity) was 37.8% in 3Q25, a 3.0 percentage point increase from 2Q25 and a 4.4 percentage point increase from 3Q24 [6] Balance Sheet & Cash Flow - Cash and marketable securities were NT$2,751.06 billion, representing 37.4% of total assets in 3Q25 [16] - Total assets amounted to NT$7,354.11 billion in 3Q25 [16] - Free cash flow was NT$139.38 billion in 3Q25 [18]

The world's largest contract chip maker delivered another record quarterly profit, as demand for chips needed for AI and high-performance computing showed no signs of abating. ...

In this articleThe TSMC logo is displayed on a building in Hsinchu, Taiwan April 15, 2025.Taiwan Semiconductor Manufacturing Company on Thursday reported a 39.1% increase in third-quarter profit from last year, hitting a fresh record as demand for artificial intelligence chips stayed strong.Here are the company's results versus LSEG SmartEstimates:Revenue: NT$989.92 billion new Taiwan dollars, vs. NT$977.46 billion expectedNet income: NT$452.3 billion, vs. NT$417.69 billion TSMC's revenue in the September q ...