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Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has once again exceeded market expectations — reporting a stunning 39.1% year-over-year surge in third-quarter net profit, driven by relentless global demand for artificial intelligence (AI) processors.

The company posted a record NT$452.3 billion ($13.9 billion USD) in net income, beating analysts’ expectations of NT$417.7 billion. Revenue climbed 30.3% to NT$989.9 billion ($30.4 billion USD) for the September quarter, outperforming forecasts of NT$977.5 billion according to LSEG SmartEstimates.

AI and High-Performance Computing Lead the Charge

TSMC’s growth is largely powered by its high-performance computing (HPC) segment — which includes chips used in AI data centers, advanced 5G systems, and high-end consumer devices. This division now makes up the bulk of the company’s revenue and continues to expand rapidly as the global race to develop AI infrastructure intensifies.

The company’s 7-nanometer and smaller process technologies — critical for advanced AI and cloud applications — accounted for 74% of total wafer revenue during the quarter, up significantly from previous years. These ultra-compact transistors allow for faster processing and improved energy efficiency, making TSMC indispensable to tech giants such as Nvidia, Apple, and AMD.

Global AI Momentum Lifts Semiconductor Industry

The AI revolution continues to reshape the semiconductor market, and TSMC sits at the center of this transformation. Analysts estimate that more than 60% of all AI chips worldwide are produced using TSMC’s advanced fabrication nodes.

Nvidia’s blockbuster AI GPUs, including the H100 and upcoming B100 series, rely exclusively on TSMC’s 4-nanometer and 3-nanometer processes. Apple’s latest A18 chip for iPhones and M4 processor for Macs are also powered by TSMC’s cutting-edge 3nm technology, reinforcing the company’s dominance in both the mobile and AI ecosystems.

Industry data from TrendForce suggests that AI server shipments will grow by over 35% in 2025, directly boosting demand for TSMC’s advanced chips. Meanwhile, 5G expansion, automotive computing, and data center scaling are adding further fuel to the company’s growth momentum.

Market Outlook and Expansion Plans

TSMC executives expressed optimism for the remainder of 2025, forecasting continued double-digit revenue growth as AI adoption accelerates across industries. The company is aggressively investing in new fabs in Arizona, Japan, and Germany, part of its global strategy to meet soaring demand and diversify production beyond Taiwan.

TSMC’s Arizona plant, expected to begin mass production by 2026, will use 4nm and 3nm technologies, representing a critical step toward supporting U.S. chip independence. Meanwhile, its Kumamoto, Japan facility — built in partnership with Sony and Denso — will focus on specialty and automotive chips to meet rising demand in the electric vehicle market.

Investors and Analysts Remain Bullish

Following the earnings report, TSMC’s shares jumped over 4% in Taipei trading, extending its 2025 rally to more than 45% year-to-date. The company’s market capitalization now exceeds $800 billion USD, solidifying its position among the world’s most valuable technology firms.

Analysts from Morgan Stanley and Goldman Sachs reiterated their “buy” ratings, highlighting TSMC’s unmatched leadership in advanced chip manufacturing and its critical role in powering the AI economy.

“TSMC remains the backbone of the global AI supply chain,” said one analyst. “As demand for high-performance chips grows exponentially, TSMC is uniquely positioned to capture this wave of transformation.”

The Bottom Line

TSMC’s record-breaking quarter underscores not only its operational excellence but also the broader AI-driven shift reshaping global technology. With surging demand, strategic global expansion, and an unmatched technological edge, the chipmaking titan continues to set the pace for the entire semiconductor industry — proving once again that the future of computing is being built, quite literally, in its fabs.