Core Viewpoint - TSMC's Q3 2025 financial results exceeded expectations, driven by strong demand in advanced process technologies and AI, with revenue reaching $33.1 billion, a year-on-year increase of 40.8% and a quarter-on-quarter increase of 10.1% [2][4]. Financial Overview - Q3 2025 revenue was $33.1 billion, slightly above the guidance range of $31.8-33 billion, with a year-on-year growth of 40.8% and a quarter-on-quarter growth of 10.1% [2][14]. - The gross margin was 59.5%, exceeding the guidance of 55.5-57.5%, with a year-on-year increase of 1.7 percentage points and a quarter-on-quarter increase of 0.9 percentage points, primarily due to cost optimization and improved capacity utilization [2][14]. - Net profit attributable to shareholders was NT$452.3 billion, a year-on-year increase of 39.1% and a quarter-on-quarter increase of 13.6%, surpassing the consensus estimate of NT$405.5 billion [2][14]. Product and Revenue Breakdown - Revenue from 7nm and below process nodes accounted for 74% of total revenue, with 3nm, 5nm, and 7nm nodes representing 23%, 37%, and 14% respectively [3][14]. - By platform, High-Performance Computing (HPC) revenue remained flat quarter-on-quarter, accounting for 57%, while smartphone revenue increased by 19% to 30% of total revenue [3][14]. - North America continued to dominate revenue sources, accounting for 76%, while revenue from China accounted for 8% [3]. Capital Expenditure and AI Demand - TSMC raised its full-year capital expenditure guidance for 2025 to $40-42 billion, up from the previous guidance of $38-42 billion, reflecting stronger-than-expected AI demand [4][17]. - The company expects AI demand to grow at a CAGR exceeding 45% from 2024 to 2029 [4][24]. Q4 2025 Guidance - For Q4 2025, TSMC projects revenue between $32.2 billion and $33.4 billion, with a midpoint year-on-year growth of 22% and a quarter-on-quarter decline of 1% [4][16]. - The gross margin is expected to be between 59% and 61%, with a midpoint year-on-year increase of 1 percentage point and a quarter-on-quarter increase of 0.5 percentage points [4][16]. Future Outlook and Strategic Initiatives - TSMC is focusing on maintaining its competitive edge in advanced process technologies and expanding its capacity in response to strong AI-related demand [20][21]. - The company is accelerating capacity expansion in Arizona, with plans to upgrade to N2 and more advanced process technologies [22]. - TSMC's rigorous capacity planning system involves close collaboration with over 500 customers to ensure alignment with market demand [21].

Core Viewpoint - TSMC reported strong Q2 2025 results with revenue of $30.07 billion, a year-on-year increase of 44.4% and a quarter-on-quarter increase of 17.8%, leading to an upward revision of the 2025 full-year revenue guidance to 30% growth [1][3][17] Financial Performance - Q2 2025 profit exceeded expectations with a gross margin of 58.6%, close to the upper limit of guidance [1][3] - Q3 2025 revenue guidance is set at $31.8 to $33 billion, representing a year-on-year increase of 38% and a quarter-on-quarter increase of 8% [3][13] - Q2 2025 capital expenditure was $9.63 billion, maintaining the full-year capex guidance of $38 to $42 billion [4][14] Revenue Composition - HPC revenue continues to rise, with 74% of revenue coming from 7nm and below process nodes [2][12] - By technology node, revenue breakdown is 24% from 3nm, 36% from 5nm, and 14% from 7nm [2][12] - By platform, HPC revenue increased by 14% quarter-on-quarter, accounting for 60% of total revenue [2][12] Guidance and Outlook - The company expects strong revenue growth in Q3 2025, with a gross margin guidance of 55.5% to 57.5% [3][13] - The company anticipates a potential decline in Q4 2025 revenue due to tariff impacts and other uncertainties [3][4] - AI demand is expected to see explosive growth within 6 months to 1 year, with a projected CAGR of nearly 45% from AI-accelerated chips [4][17] Global Expansion Plans - TSMC plans to invest $165 billion in advanced semiconductor manufacturing in Arizona, including six advanced wafer fabs and two advanced packaging facilities [19][20] - The company is also expanding in Japan and Europe, with plans for specialized technology factories in Kumamoto and Dresden [20][21] Technological Advancements - N2 and A16 technologies are positioned to meet the growing demand for high-efficiency computing, with N2 expected to enter mass production in the second half of 2025 [21][22] - The company is focusing on enhancing its technology leadership and operational excellence to strengthen its competitive position [18][41]