TSMC raises sales growth forecast to 30% amid strong demand for advanced chips

Taipei [Taiwan], July 18 (ANI): Taiwan Semiconductor Manufacturing Co. (TSMC) has increased its U.S. dollar-based sales growth forecast to 30 per cent, up from the previous estimate of 24-26 per cent, driven by robust demand for its cutting-edge process technologies, Focus Taiwan reported.

At a recent investor conference, TSMC Chairman CC Wei highlighted the growing need for advanced chips fueled by artificial intelligence (AI) applications, which require greater computing power.

Wei noted that TSMC is benefiting from rising demand for emerging technologies, particularly high-performance computing (HPC) devices.

He forecast strong shipment growth for TSMC advanced 3-nanometer (3nm) and 5-nanometer (5nm) process technologies, underpinning the company updated 30 per cent year-on-year sales growth projection.

The 3nm process, TSMC most advanced technology currently in commercial production, remains in tight supply, alongside the 5nm process.

Wei emphasised that the supply for these advanced technologies is barely keeping pace with market demand.

Despite uncertainties posed by the U.S. administration tariff policies and related global economic risks, Wei said TSMC customers have not adjusted their orders so far.

To further expand its advanced technology portfolio, TSMC is continuing the development of more sophisticated 2nm process fabs in Hsinchu and Kaohsiung, with mass production of the 2nm process expected to begin later this year.

Wei also highlighted strong demand for AI chips and noted that capacity for 3D Chip-on-Wafer-on-Substrate (CoWoS) packaging services remains tight. However, TSMC is actively working to increase capacity and narrow the gap between supply and demand.

Ahead of the investor conference, TSMC reported a second-quarter net profit of NT dollar 398.27 billion (USD 10.11 billion), marking a 60.7 percent increase year-on-year and a 10.2 percent rise from the previous quarter.

HPC device chips accounted for approximately 60 per cent of TSMC total second-quarter sales of NT dollar 33.79 billion.

TSMC Chief Financial Officer Wendell Huang projected third-quarter sales between USD 31.8 billion and USD 33.0 billion, representing an 8 per cent increase from the second quarter at the midpoint. This forecast assumes an exchange rate of NT dollar 29 to the US dollar, implying a 6.6 per cent appreciation of the Taiwan dollar compared to the second quarter.

Huang explained that the currency appreciation is expected to reduce TSMC gross margin by 2.6 percentage points and sales by 6.6 per cent. The company forecasts its third-quarter gross margin to range between 55.5 and 57.5 per cent, with the midpoint down 2.1 percentage points from the previous quarter. Huang reiterated that TSMC aims to maintain a gross margin of 53 per cent or higher over the long term.

TSMC also confirmed its 2025 capital expenditure (capex) forecast remains unchanged at USD 38 billion to USD 42 billion. The company reported second-quarter capex of USD 9.63 billion, down 4.27 per cent from the previous quarter but up 51.4 per cent year-on-year. For the first half of 2025, capex increased 62.3 per cent from the same period last year, reaching USD 19.69 billion. (ANI)

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