TSMC Achieves Record Quarter Driven by AI Processor Sales
Since AI processors account for almost two-thirds of TSMC's business, their strong sales alongside ramp-up for Apple's latest processors on the N3P fabrication process drove the company's record performance. TSMC had its best quarter thus far with revenues of $33.1 billion for Q3.
Q3 Financials
TSMC's financial results showed significant year-on-year growth and quarter-on-quarter growth:
- Revenue: $33.1 billion, a 40.8% increase year-over-year.
- Net Income: $14.77 billion, a 39.1% increase year-over-year.
- Gross Margin: Achieved an incredible 59.5%.
- Earnings Per Share: NT$17.44 (US$2.92 per ADR).
Growth Drivers
High-performance computing (HPC) including AI accelerators and infrastructure components continued to be the largest contributor with 57% of total wafer sales. Sales in the smartphone segment increased by 19% sequentially, accounting for 30% of sales, mainly on production for Apple's iPhone 17-series and M5-series processors on TSMC's 3nm-class N3P node.
Advanced process technologies (defined as 7nm and below) accounted for 74% of total wafer revenue, with 3nm processes alone contributing 23%.
More Advanced Chips to be Produced Faster in Arizona
The earnings call revealed another major development: the acceleration of U.S. operations. Citing strong multi-year AI-related demand from customers like NVIDIA, AMD, and Apple, the technology roadmap in Arizona is being compressed.
TSMC said it is on the verge of securing another large land plot to ramp up its operations in Arizona. C.C. Wei, CEO, stated that the company plans to introduce N2 (2nm) and more advanced process technologies to the U.S. fab faster than previously planned. This will make TSMC the second company after Intel to manufacture on a 2nm node in the U.S., possibly as early as the second half of 2026, and its plans to advance to A16 (1.6nm) in Arizona are also being considered.
Bright Outlook for the Future
TSMC expects the high demand for its leading-edge technologies to remain. The company is forecasting revenue for the fourth quarter of 2025 to be between $32.2 billion and $33.4 billion, with a gross margin falling between 59% and 61%.
"We expect our business to be supported by continued strong demand for our leading-edge process technologies," C.C. Wei said. "We continue to see very strong AI-related demand throughout 2025 now, while non-AI end market segments have bottomed out and are beginning to see mild recovery."
