Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) has revised its U.S. dollar-based sales growth forecast for 2025 to 30 percent, an increase from the previous estimate of 24-26 percent. This adjustment comes as a result of heightened demand for its advanced process technologies.
According to Focus Taiwan, TSMC Chairman C.C. Wei highlighted during an investor conference that the increasing need for AI applications, which require substantial computing power, is anticipated to drive demand for advanced chips. TSMC is seeing benefits from the growing demand for emerging technologies, including high-performance computing (HPC) devices. The company projects that shipments of its advanced 3-nanometer and 5nm process technologies will rise, supporting a 30 percent year-on-year sales increase. The 3nm process stands as TSMC's most advanced technology currently in commercial production.
Despite the uncertainties and risks posed by the Trump administration's tariff policies, which have affected global economic conditions, Wei noted that TSMC's clients have not yet adjusted their orders. He also mentioned that the supply of TSMC's 3nm and 5nm process technologies is barely meeting market demand. In response, TSMC is working on expanding its advanced technology portfolio by building sophisticated 2nm process fabs in Hsinchu and Kaohsiung, with mass production expected to commence later this year.
Wei further commented on the strong demand for AI chips, indicating that the supply of 3D Chip-on-Wafer-on-Substrate (CoWoS) packaging services remains constrained. However, TSMC is actively working to increase capacity to meet market needs. Ahead of the investor conference, TSMC reported a net profit of NT$398.27 billion (US$10.11 billion) in the second quarter, marking a 60.7 percent increase year-on-year and a 10.2 percent rise from the previous quarter.
In the second quarter, chips for HPC devices contributed to approximately 60 percent of TSMC's total sales of NT$933.79 billion. At the investor conference, TSMC Chief Financial Officer Wendell Huang forecasted third-quarter sales to be between US$31.8 billion and US$33.0 billion, with the midpoint representing an 8 percent increase from the second quarter.
Huang noted that the forecast is based on an exchange rate of NT$29 to the U.S. dollar, suggesting a 6.6 percent appreciation of the Taiwan dollar from the second quarter. This appreciation is expected to decrease TSMC's gross margin by 2.6 percentage points and sales by 6.6 percent. Consequently, TSMC anticipates its gross margin to range between 55.5 and 57.5 percent in the third quarter, with the midpoint declining 2.1 percentage points from the previous quarter. Despite these challenges, Huang reiterated that TSMC aims to maintain a gross margin of 53 percent or higher over the long term.
Meanwhile, TSMC has maintained its 2025 capital expenditure forecast at US$38 billion to US$42 billion. The company reported second-quarter capital expenditure of US$9.63 billion, a 4.27 percent decrease from the previous quarter but a 51.4 percent increase year-on-year. In the first half of 2025, capital expenditure rose 62.3 percent from a year earlier to US$19.69 billion.