TSMC’s Record Q3 Highlights AI’s Growing Grip on the Chip Industry

TSMC’s record-breaking quarter underscores how deeply the world’s hunger for artificial intelligence chips is reshaping the tech industry’s financial landscape. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker and a crucial supplier to Apple, Nvidia, AMD, Broadcom, and Qualcomm, reported stunning results for its third quarter, with profits and revenues soaring on the back of the AI boom.

During the three months ending in September, TSMC posted an extraordinary net profit of 452.3 billion New Taiwan dollars (around $15 billion USD), marking a massive 39.1% jump year-over-year.

Revenue climbed 30%, beating even the most optimistic market projections. Analysts had expected around 417.7 billion NTD according to LSEG SmartEstimate, but the actual figures comfortably surpassed those estimates, solidifying TSMC’s position as the most critical foundry in global tech supply chains.

Despite this financial triumph, shares of TSMC – traded on the New York Stock Exchange under the ticker TSM – fell modestly by 1.6% to close at $299.84. Market analysts at Morningstar quickly dismissed the drop as short-term noise, emphasizing that the foundry’s growth prospects remain robust. In a recent research note, Morningstar described demand for TSMC’s chips as “unyielding,” noting that even potential tariffs on exports to the U.S. would barely dent its momentum. “Given TSMC’s dominance,” they wrote, “we doubt the company would be hindered if it faced tariffs on shipments to U.S. customers. We expect AI demand to stay resilient.”

That demand shows no sign of slowing. TSMC recently raised its forecast for 2025, expecting revenue growth to climb into the mid-30% range in U.S. dollar terms. The company also confirmed its aggressive capital spending plans – up to $42 billion this year alone – to expand its production capacity, including next-generation 2nm chips that are expected to power future AI processors and premium smartphones.

Much of TSMC’s current success is tied directly to the global AI revolution. The foundry’s clients – Nvidia, AMD, and Broadcom – are producing unprecedented volumes of AI processors for cloud computing giants and data center operators. Nvidia’s dominance in GPU-based AI computing, AMD’s growing server chip lineup, and Broadcom’s networking components together form the foundation of the world’s AI infrastructure, and TSMC is the manufacturer making it all possible.

CEO C.C. Wei expressed growing confidence in the trend, saying, “AI demand continues to be stronger than we anticipated even three months ago. We’re seeing a very solid pipeline and clear signals from customers requesting more capacity.” He added that even in the face of geopolitical restrictions such as U.S. sanctions on technology sales to China, TSMC’s AI-driven business would continue to flourish thanks to global demand.

As AI reshapes industries – from cloud computing to consumer devices – TSMC’s role as the unseen force behind the most powerful chips in the world has never been more evident. The foundry’s dominance doesn’t just symbolize Taiwan’s technological prowess; it underscores how AI has become the new fuel of the global economy.