TSMC ups 2025 sales growth outlook to 30%

Taipei, July 17 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) has raised its U.S. dollar-based sales growth forecast to 30 percent, up from 24-26 percent, citing strong demand for its advanced process technologies.

At an investor conference, TSMC Chairman C.C. Wei (魏哲家) said AI applications require greater computing power, which is expected to drive demand for advanced chips.

Wei said TSMC is benefiting from rising demand for emerging technologies such as high-performance computing (HPC) devices, and forecast that shipments of its advanced 3-nanometer and 5nm process technologies will grow, supporting a projected 30 percent year-on-year sales increase.

The 3nm process is TSMC's most advanced technology currently in commercial production.

Although the Trump administration's tariff policies have created uncertainty, posed risks to the global economy, and affected consumption, Wei said TSMC's clients have not adjusted their orders so far.

Wei said the supply of TSMC's 3nm and 5nm process technologies is barely keeping up with market demand.

To expand its advanced technology portfolio, TSMC is continuing efforts to build more sophisticated 2nm process fabs in Hsinchu and Kaohsiung, Wei said. Mass production of the 2nm process is expected to begin later this year.

Wei also said that with strong demand for AI chips, the supply of 3D Chip-on-Wafer-on-Substrate (CoWoS) packaging services remains tight, but TSMC is working to expand capacity and close the gap between demand and supply.

Ahead of the investor conference, TSMC reported NT$398.27 billion (US$10.11 billion) in net profit in the second quarter, up 60.7 percent year-on-year and 10.2 percent from the previous quarter.

In the second quarter, chips for HPC devices accounted for about 60 percent of TSMC's total sales of NT$933.79 billion, the company said.

At the investor conference, TSMC Chief Financial Officer Wendell Huang (黃仁昭) said third-quarter sales are forecast between US$31.8 billion and US$33.0 billion, with the midpoint representing an 8 percent increase from the second quarter.

Huang said the forecast assumes an exchange rate of NT$29 to the U.S. dollar, implying the Taiwan dollar could appreciate 6.6 percent from the second quarter. He added that this appreciation is expected to reduce TSMC's gross margin by 2.6 percentage points and sales by 6.6 percent.

As a result, TSMC forecasts its gross margin -- the difference between revenue and cost of goods sold -- to range between 55.5 and 57.5 percent in the third quarter, with the midpoint expected to decline 2.1 percentage points from the previous quarter.

Huang reiterated that TSMC is expected to maintain a gross margin of 53 percent or higher over the long term.

Meanwhile, TSMC kept its 2025 capital expenditure forecast unchanged at US$38 billion to US$42 billion.

TSMC said second-quarter capex was US$9.63 billion, down 4.27 percent from the previous quarter but up 51.4 percent year-on-year. In the first half of 2025, capex rose 62.3 percent from a year earlier to US$19.69 billion.