Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) posted an all-time high revenue of $30.5 billion for the second quarter, though margin concerns weighed on investor sentiment as a stronger Taiwanese dollar pressured profitability.
The world's largest contract chipmaker reported June revenue of NT$263.7 billion ($8.5 billion), up 26.9% from a year earlier but down from NT$320.5 billion in May, marking the weakest month-on-month growth for June in the past four years. It also marked the second consecutive month of slowing year-on-year revenue growth.
Despite the deceleration, TSMC's total revenue for the first half of 2025 surged 40% year-on-year to NT$1.77 trillion.
Every major player in artificial intelligence — including Nvidia, Apple, AMD and Qualcomm — depends on TSMC to manufacture cutting-edge chips.
Still, challenges remain. The company's gross margin and operating margin are expected to fall short of guidance, with the New Taiwan dollar strengthening to an average of 31 per US dollar in the second quarter, compared to the company’s forecast of 32.5.
This is the fourth time in five years TSMC has posted record second-quarter revenue, reflecting a surge in demand for AI-related compute power. However, the company’s full-year growth target of 25% implies just 1% sequential growth in the second half — a sharp slowdown compared to the 27% half-over-half growth recorded in 2024.
Investors also remain cautious about capital expenditure levels and margin drag from TSMC’s overseas expansion in Japan and the US, as well as potential softness in smartphone-related demand.
Shares of TSMC dipped about 0.8% in early trading Thursday on the New York Stock Exchange.