TSMC Q2 Earnings Outshine Intel: Trade Intel, Own TSMC

TSMC reported Q2 '25 earnings, exceeding expectations with 60% growth in net income and raising 2025 sales growth to 30%. This outperformance is a significant contrast to Intel's struggles, leading some to consider TSMC as a stock to own and Intel as a trade.

Taiwan Semiconductor Manufacturing Company (TSMC) reported its Q2 '25 earnings, exceeding expectations with a 60% growth in net income and raising 2025 sales growth to 30%. This robust performance stands in stark contrast to Intel's ongoing struggles, leading some analysts to consider TSMC as a stock to own and Intel as a trade.

TSMC's net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, beating estimates. The company's shares were up nearly 6% at 2:25 a.m. ET on trading platform Robinhood [1]. This impressive growth is primarily driven by the increasing demand for AI chips, with advanced nodes (7nm or smaller) accounting for 74% of TSMC's total wafer revenue in the quarter [1].

The company's dominance in the semiconductor market is evident, with 90%+ market share in nodes below 10nm. TSMC's 3nm node alone contributed 22% of sales in Q2, driven by strong demand for AI chips like NVIDIA's H100 and AMD's MI355X GPUs [2]. Despite a 17.7% month-over-month dip in June, the figure still rose 26.9% from June 2024, highlighting sustained structural demand for advanced nodes critical to AI and high-performance computing (HPC) [2].

Intel, on the other hand, is set to report on July 24th, having trailed Wall Street consensus on outlook last quarter, guiding for sales to decline 2-11% Q/Q to $11.2-$12.4B, trailing expectations at $12.8B [3]. Intel's struggles are a stark reminder of the challenges faced by companies that lag in technological advancements and market share.

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 [2].

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-reports-record-q2-profit-beats-market-forecast-ai-chip-demand-2507/
[3] https://seekingalpha.com/article/4801938-intel-vs-tsmc-one-to-trade-one-to-own