TSMC Hits Record Q3 Profit as AI Boom Powers Unstoppable Chip Demand

Taiwan Semiconductor Manufacturing Co. (TSMC) posted its highest-ever quarterly profit in Q3 2025, driven by surging global demand for artificial intelligence (AI) infrastructure. The world’s leading contract chipmaker reported a net profit of T$452.3 billion ($14.75 billion) for the three months ending September 30, beating the Reuters/LSEG estimate of T$417.7 billion. Revenue climbed 30% to T$989.92 billion ($32.3 billion), while gross margin stood at 59.5%, marking the company’s seventh straight quarter of growth.

TSMC CEO C.C. Wei highlighted strong and sustained AI-fueled demand, noting that the rapid increase in AI model usage is boosting computation needs and semiconductor consumption. “We continue to observe robust AI-related demand throughout 2025,” Wei said during the post-earnings call, emphasizing confidence in the company’s global customer base despite ongoing U.S.-China trade tensions. Even if China’s market is restricted, Wei expects AI growth to remain “very positive,” forecasting a 40%+ compound annual growth rate for AI-driven demand.

TSMC CFO Wendell Huang projected fourth-quarter revenue between $32.2 billion and $33.4 billion, with a gross margin of 59–61%. He also raised the company’s 2025 capital expenditure outlook to $40–42 billion, up from $38–42 billion, as TSMC continues expanding production in overseas facilities—expected to slightly dilute margins by 1–2%.

The semiconductor giant’s record performance reflects massive investments in AI and data center infrastructure from companies like OpenAI, SoftBank, Oracle, Nvidia, and Apple. Analysts at Morgan Stanley raised their target price for TSMC shares to T$1,688, citing the firm’s robust earnings and optimistic AI semiconductor outlook. U.S.-listed TSMC shares rose over 1.9% in premarket trading, reinforcing its role as a key bellwether in the global AI chip boom.