TSMC Reports Q2 Earnings: Revenue at $30.07B, EPS at $2.74

Taiwan Semiconductor Manufacturing Company (TSMC) reported Q2 EPS of $2.74 and revenue of $30.07B. The company expects strong demand for its leading-edge process technologies in Q3 2025.

Taiwan Semiconductor Manufacturing Company (TSMC) reported a strong second-quarter earnings performance, with earnings per share (EPS) of $2.74 and revenue of $30.07 billion. The company's net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, beating estimates [1]. This robust performance is largely attributed to the growing demand for artificial intelligence (AI) chips, which have become a key driver of TSMC's growth.

TSMC's advanced process technologies, particularly its 3nm and 5nm nodes, have been in high demand, contributing significantly to the company's revenue. The 3nm node alone accounted for 22% of sales in Q2, up from 9% in Q1 2024, driven by strong demand for AI chips like NVIDIA's H100 and AMD's MI355X GPUs [2]. The company's CEO, C.C. Wei, noted that AI-related demand remains very strong and consistently outpacing supply.

Despite a 17.7% month-over-month dip in June, the June figure still rose 26.9% from June 2024, highlighting sustained structural demand for advanced nodes critical to AI and high-performance computing (HPC) [2]. TSMC's ability to scale 3nm capacity—by converting 5nm fabrication tools—ensures it can meet demand without compromising margins long-term [2].

TSMC's Q2 earnings call, scheduled for July 17, will likely reaffirm its 2024–2029 targets: a 20% revenue CAGR in USD, 53%+ gross margins, and ROE above 25% [2]. The upcoming earnings announcement is expected to cause price volatility, but TSMC's structural advantages—technological leadership, unmatched scale, and AI/HPC demand resilience—make it the best proxy for the semiconductor supercycle [2].

While TSMC faces potential headwinds from the trade policy of the U.S. President Donald Trump, who has threatened steep "reciprocal tariffs" on Taiwan, the company has warned that tariffs could raise prices and reduce demand. However, three factors mitigate this risk: customer lock-in, geographic diversification, and pricing power [2]. Major AI players like NVIDIA and AMD rely on TSMC's advanced nodes for competitive products, switching suppliers would delay time-to-market. TSMC's Arizona fab (3nm-capable by 2026) and Japan facilities insulate it from trade restrictions. TSMC's dominance in leading-edge nodes allows it to pass costs to clients without losing share [2].

TSMC's Q2 results reaffirm its role as the linchpin of the AI revolution. While geopolitical risks and monthly volatility persist, the structural demand for advanced nodes and TSMC's insurmountable technical lead make its June dip a buying opportunity. Investors should overweight TSMC for exposure to the AI era's most critical infrastructure.

References:
[1] https://www.cnbc.com/2025/07/17/tsmcs-second-quarter-profit-soars-nearly-61percent-as-ai-chip-demand-stays-strong-.html
[2] https://www.ainvest.com/news/tsmc-set-report-q2-earnings-strong-ai-fueled-growth-2507/