TSMC profit jumps 60% on AI chip boom

Taiwan Semiconductor Manufacturing Co. (TSMC) delivered a robust first-quarter performance in 2025, reporting a 42% year-over-year revenue increase to NT$839.25 billion (approximately $25.85 billion) and a 60% surge in net profit, well exceeding analyst expectations. The industry giant maintained its full-year forecast despite ongoing concerns over U.S. tariffs and export controls on semiconductors, particularly those affecting sales to China.

Strong demand for artificial intelligence (AI) chips, along with continued growth in AI server applications and smartphones, has positioned TSMC favorably. The company expects its AI chip revenue to double in 2025 and forecasts second-quarter revenue between $28.4 billion and $29.2 billion, surpassing the consensus forecast of $27.1 billion. CEO C.C. Wei emphasized that there has been no noticeable change in customer behavior despite uncertainties surrounding U.S. trade policies.

In response to potential geopolitical risks, TSMC is strategically expanding its manufacturing footprint. Approximately 30% of the capacity for its latest chips will eventually be housed in U.S.-based facilities, bolstering the company’s access to the North American market. This shift is evident in the revenue composition: TSMC’s sales from China have dropped from 9% to 7% of total revenue in the past year, while North America's contribution has increased from 69% to 77%.

TSMC’s resilience is contrasted with concerns in the broader semiconductor industry, where companies like Nvidia have warned of significant earnings hits due to U.S. tariffs imposed on Chinese imports.