Taiwan Semiconductor Rides AI Wave To Double-Digit Revenue Gains in July

Taiwan Semiconductor Manufacturing Co TSM on Friday reported consolidated net revenue of approximately 323.17 billion New Taiwanese dollars (roughly $10.66 billion) for July 2025, up 22.5% quarter-over-quarter, backed by the artificial intelligence frenzy.

The contract chipmaker’s topline rose by 25.8% year-over-year (Y/Y). The company’s revenue for January through July 2025 reached 2.1 trillion New Taiwanese dollars (roughly $69.3 billion), rising 37.6% Y/Y.

Taiwan Semiconductor stock gained 23% year-to-date.

Also Read: Taiwan Semiconductor Stock Slips As Samsung Scores $16.5 Billion Tesla Chip Deal

On August 7, Taiwan Semiconductor jumped ~5% in overnight trade after Taiwanese officials confirmed the chipmaker is exempt from President Donald Trump’s proposed 100% tariffs on semiconductor chips.

National Development Council chief Liu Chin-ching told parliament that Taiwan Semiconductor qualifies for the exemption because it operates U.S. factories, including fabrication plants in Arizona, under its $165 billion investment commitment. The move eases investor concerns as Taiwan Semiconductor supplies chips to major U.S. clients like Apple AAPL and Nvidia NVDA.

CEO C.C. Wei has said U.S. tariffs pose “indirect headwinds” but noted that demand for AI chips “consistently outpaces supply,” keeping the company well-positioned despite trade tensions.

On July 17, the chipmaker gained over 4% after it reported second-quarter results that exceeded analyst expectations, fueled by strong global demand for its advanced processors used in artificial intelligence.

Taiwan Semiconductor reported net sales of $30.07 billion, up 38.6% Y/Y and 11.3% Q/Q, beating its guidance range and topping the $30.04 billion consensus. Net income rose 60.7% Y/Yto $2.47 per share, above the $2.37 estimate. Gross margin expanded to 58.6%, and operating margin climbed to 49.6%, driven by high demand for 3-nm and 5-nm technologies, which accounted for 60% of total revenue.

The company guided third-quarter revenue between $31.8 billion and $33.0 billion, with gross margin projected at 55.5% to 57.5% and operating margin at 45.5% to 47.5%, supported by continued strength in leading-edge process technologies.

Key revenue drivers included High-Performance Computing (60% of revenue) and Smartphones (27%), with North America contributing 75% of sales. Management also cited positive momentum from the U.S. government easing certain chip export restrictions to China, enabling Nvidia to resume H20 AI chip sales.

Chairman C.C. Wei highlighted a $100 billion expansion of U.S. manufacturing investment, adding to a prior $65 billion commitment for three Arizona fabs. However, he cautioned that potential U.S. tariffs on Taiwan could temper fourth-quarter momentum despite no immediate change in customer orders.

On August 7, Wedbush analyst Daniel Ives called Apple’s new $100 billion U.S. investment a strategic move to ease Trump administration tensions and secure long-term growth under tariff pressure.

Ives linked the plan to Apple’s partnerships with Taiwan Semiconductor and other chipmakers, projecting over 19 billion U.S.-made chips in 2025. He said the initiative strengthens domestic supply chains and boosts Apple’s standing with the White House, even as large-scale U.S. iPhone production remains unlikely.

Price Action: TSM stock is trading higher by 0.13% to $242.93 premarket at last check on Friday.

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