TSMC surges over 4% pre-market as Q2 revenue jumps 38.6% and net profit soars 61%, exceeding expectations

TSMC surges over 4% pre-market as Q2 revenue jumps 38.6% and net profit soars 61%, exceeding expectations

Taiwan Semiconductor Manufacturing Company (TSMC) reported a significant increase in its second-quarter (Q2) earnings, with revenue up 38.6% year-over-year (YoY) and net profit surging by 61%, according to its latest financial results. The company's stock surged over 4% in pre-market trading following the announcement.

The strong performance was driven by robust demand for artificial intelligence (AI) technology, with TSMC's advanced 3nm and 5nm wafer technology being a key component of advanced AI processors. The company's chairman and CEO, CC Wei, previously stated that the company's business would remain strong despite potential tariffs affecting chip demand.

TSMC's Q2 revenue reached T$933.79 billion, a significant increase from the previous year, while net profit hit T$398.27 billion. These figures exceeded market expectations, with earnings per share (EPS) of T$15.36 ($2.47 per American Depository Receipt). The company's gross margin rose to 58.6%, down slightly from the previous quarter but up 5.4 percentage points year-over-year.

The high-performance computing (HPC) segment contributed 60% of the total revenue, with smartphones accounting for 27% and IoT and automotive segments each contributing 5%. The fastest sequential growth was observed in Digital Consumer Electronics (DCE), which accounted for only 1% of the total revenue.

Looking ahead, TSMC guided to Q3 net revenue of $31.8 billion to $33 billion, with gross and operating margins expected to be between 55.5% and 57.5%, and 45.5% and 47.5%, respectively. The company also raised its full-year revenue growth forecast to 30%, up from its previous 20–30% range.

The stock's strong performance reflects investor confidence in TSMC's ability to navigate geopolitical risks and maintain growth in the face of increasing competition in the AI chip market.

References:
[1] https://www.investing.com/news/stock-market-news/tsmc-q2-profit-soars-61-to-record-high-beats-expectations-on-solid-ai-demand-4138714
[2] https://www.marketscreener.com/quote/stock/TSMC-TAIWAN-SEMICONDUCTOR-6492349/news/TSMC-Q2-profit-surges-60-reaches-historic-high-50530364/
[3] https://www.barrons.com/articles/tsmc-earnings-stock-price-4d736845