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TSMC Sets New Records in Q3 with Strong AI Chip Demand
ByAinvest
Thursday, Oct 16, 2025 10:30 am ET1min read
Taiwan Semiconductor Manufacturing (TSM) reported a record-breaking third-quarter profit, driven by surging demand for artificial intelligence (AI) and high-performance computing chips. The company's net income rose 39% year-over-year (YoY) to $8.3 billion, while revenue grew 30% to $33.1 billion, surpassing analysts' expectations, according to an
.The strong performance was largely attributed to robust demand for 3nm and 5nm chips across AI, data center, and smartphone applications. TSMC's CEO, C.C. Wei, noted that enterprise AI and increasing sovereign AI efforts were expected to support chip demand, forecasting 2025 revenue growth at around mid-30%, according to a
.Despite potential sales headwinds from U.S. trade policies, Wei remained confident that the company could maintain a compound annual growth rate (CAGR) of 40% or higher. He also dismissed concerns over the U.S. blocking chip sales to Chinese markets, stating that AI growth would be very positive even if the Chinese market was not available, as the Investing.com report noted.
TSMC's CFO, Wendell Huang, forecast fourth-quarter revenue between $32.2 billion and $33.4 billion, with gross margins expected to be between 59% and 61%. Huang also slightly increased the company's 2025 capital expenditure outlook to a range of $40 billion–$42 billion, a detail included in the Seeking Alpha note.
The company's financial health is underscored by its impressive revenue growth and profitability metrics, with a 3-year compound annual growth rate (CAGR) of 22.2%, an operating margin of 48.72%, and a net margin of 42.46%. TSMC's balance sheet reflects strong financial health, with a current ratio of 2.37 and a debt-to-equity ratio of 0.2, indicating a robust liquidity position and manageable debt levels, according to a
.TSMC's market capitalization stands at approximately $1.58 trillion, and its valuation metrics indicate a premium positioning in the market, with a P/E ratio of 34.64, a P/S ratio of 11.11, and a P/B ratio of 8.3. Analyst sentiment remains positive, with a strong buy consensus, as noted by GuruFocus.
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