TSMC Q2 Earnings Soar 61%, Despite Tariff Concerns, but Futures Remain Muted on Cautious Market Mood.

Taiwan Semiconductor Manufacturing Company (TSMC) reported a record quarterly profit of $13.5 billion, beating forecasts, driven by strong demand for AI chips. However, the company remains cautious about the impact of tariffs. Despite this, TSMC's earnings failed to lift the cautious mood on Wall Street, with futures muted ahead of key earnings reports from other tech companies.

Taiwan Semiconductor Manufacturing Company (TSMC) has reported a record quarterly profit of $13.5 billion, significantly exceeding market forecasts. The company's strong performance was driven by robust demand for artificial intelligence (AI) chips, particularly for leading-edge nodes below 7 nanometers. TSMC's net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, beating estimates [1].

The company's shares were up nearly 6% at 2:25 a.m. ET on trading platform Robinhood, reflecting investor optimism about TSMC's financial performance. However, the company faces potential headwinds from U.S. trade policies, including threatened tariffs by President Donald Trump. Taiwan was threatened with a 32% reciprocal tariff rate in April, and Trump has warned of potential additional tariffs on semiconductors [2].

Despite the concerns, TSMC's earnings failed to lift the cautious mood on Wall Street. Futures were muted ahead of key earnings reports from other tech companies. TSMC's Chief Executive C.C. Wei noted that the company is taking into consideration the possible impact of tariffs and other uncertainties, becoming more conservative in its outlook [3].

The company's record profit is a testament to the growing demand for AI chips, with advanced nodes accounting for 74% of TSMC's total wafer revenue in the quarter. The 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 [4].

However, TSMC is also facing challenges such as the appreciation of the Taiwan dollar, which can impact its margins. The company's third-quarter gross margin is expected to fall to between 55.5% and 57.5%, down from 58.6% in the second quarter, due to the ramp-up of investment in new factories in the U.S. and Japan [2].

Despite these challenges, TSMC remains committed to its capital expenditure plan for the year, with a forecast of $38 billion to $42 billion in spending. The company announced plans for a $100 billion U.S. investment alongside Trump at the White House in March, on top of $65 billion pledged for three plants in Arizona [3].

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.marketscreener.com/quote/stock/TSMC-TAIWAN-SEMICONDUCTOR-6492349/news/TSMC-posts-record-quarterly-profit-on-AI-demand-but-cautious-on-tariff-impact-50528905/
[3] https://www.reuters.com/world/asia-pacific/tsmc-quarterly-profit-seen-hitting-record-trump-tariffs-forex-concern-2025-07-16/
[4] https://www.ainvest.com/news/tsmc-reports-record-q2-profit-beats-market-forecast-ai-chip-demand-2507/