TSMC's Strategic Maneuvers: Navigating Market Waves and AI-Driven Growth

Taiwan Semiconductor Manufacturing Company (TSMC) experienced a decline of 0.88% last week, marking a three-day decrease that totals 2.21%. Despite the recent downturn, the company has seen a 21.84% increase since the beginning of the year, with its latest market capitalization reaching approximately 12.389 trillion New Taiwan dollars.

Amid rising interest in artificial intelligence and exemptions from U.S. tariffs on major chip manufacturers, TSMC has been instrumental in boosting Taiwan’s stock market. The Taiwan Weighted Index saw a significant rise, nearing historic highs it last achieved in July 2024. Since April, the index has surged approximately 40%, largely driven by the advancements from TSMC, NVIDIA's core supplier in chip manufacturing.

The U.S. announced tariff exemptions for several companies including TSMC in August, which accelerated market gains. Analysts note that with tariff concerns largely resolved, investor focus has shifted back to fundamentals, and TSMC's stock is expected to continue its upward trajectory.

TSMC reported promising second-quarter earnings that exceeded expectations and raised its 2025 revenue growth forecast. The company's projected sales growth in U.S. dollar terms has been adjusted from the previous midpoint of 20% to around 30%, with expectations for third-quarter revenue to range between 318 billion to 330 billion dollars, a substantial increase compared to previous quarters.

For July, TSMC’s revenue reached 3,232 billion New Taiwan dollars, a year-over-year growth of 26%, confirming escalating investments in the AI field. Despite currency pressure from the New Taiwan dollar's appreciation, TSMC has maintained a robust growth momentum, reporting a 38% increase in revenue compared to the same period in 2024.

Strategically, TSMC plans to phase out its 6-inch wafer production over the next two years while consolidating its 8-inch wafer capacity. This decision aligns with long-term corporate strategy and market dynamics, concentrating on optimizing manufacturing efficiency.

While the 8-inch wafer adjustment is underway, TSMC continues to uphold its fiscal targets, ensuring seamless operations during this transition. The company emphasizes close collaboration with clients to ensure a smooth transition and meet demands during this period of change.

The company's capital expenditure plans remain unchanged, continuing efforts to expand its capabilities globally with investment in advanced manufacturing facilities in Arizona, Japan, Germany, and Taiwan.

Plans for 2026 anticipate continued robust growth for TSMC, driven by demand for advanced process nodes and escalating AI applications. Industry projections suggest that these factors combined will reinforce TSMC's position as a leading semiconductor manufacturer, capable of meeting ongoing and future technological demands.