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- **Revenue Beat**: Q3 2025 revenue $33.1B (+10.1% QoQ), above guidance, driven by AI and HPC demand.
- **Gross Margin Expansion**: 59.5% (vs. 58.6% Q2), with 200bps beat vs. guidance due to FX and cost savings.
- **AI Growth Momentum**: 2025 AI CAGR mid-40s%, token volume growth exponential, offset by node migration efficiency.
- **CapEx Intensity**: 2025 CapEx $40-42B (70% advanced tech), reflecting confidence in AI-driven growth.
- **Geopolitical Risk**: 1-2% gross margin dilution from overseas fabs in 2025, widening to 3-4% in later years.

**【CFO Financial Commentary】**
- Q3 2025 revenue: $33.1 billion (10.1% QoQ growth), slightly above guidance.
- Gross margin: 59.5% (up 90bps QoQ), driven by cost improvements and higher utilization, offset by FX and overseas fabs dilution.
- Operating margin: 50.6% (up 100bps QoQ).
- Q4 2025 guidance: Revenue $32.2-33.4 billion (1% QoQ decline), gross margin 59-61%.
- 2025 CapEx narrowed to $40-42 billion (70% for advanced tech, 10-20% for specialty tech).
- Full-year 2025 revenue growth expected near mid-30s% YoY.

**【CEO Remarks】**
- AI demand explosive, with token volume growth driving leading-edge silicon demand.
- Full-year 2025 revenue growth near mid-30s% YoY, supported by AI and non-AI market recovery.
- Global fabs expansion: Arizona (N2+ fabs), Japan (specialty fabs), Germany (specialty fabs), Taiwan (2nm fabs).
- N2 process on track for H2 2025 volume production, N2P and A16 derivatives to follow in H2 2026.
- Gross margin dilution from overseas fabs expected at 1-2% in 2025, 2-3% in early years.

**【Q&A Highlights】**
- **AI Growth**: CAGR mid-40s%+ for AI accelerators, token growth exponential but offset by node migration efficiency.
- **CapEx**: 2025 CapEx $40-42B reflects confidence in AI megatrend, with 70% for advanced tech.
- **Gross Margin**: 2026 N2 ramp will cause dilution, but N3 profitability improving.
- **Competition**: Foundry 2.0 strategy focuses on end-to-end solutions, not direct competition with Intel.
- **Smartphone**: Q3 2025 smartphone revenue up 19% QoQ, no prebuild concerns as inventory healthy.

Taiwan Semiconductor Manufacturing Company Limited (TSM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

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Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

TSM

TSM fundamentals

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