--- title: "Taiwan Semiconductor Lifts Outlook After Blowout Quarter, CEO Says AI Signals From Clients Are 'Very Strong'" description: "Taiwan Semiconductor Manufacturing Co (TSMC) reported a strong third-quarter performance, with net sales of $33.1 billion, exceeding analyst expectations. The company attributed its success to high de" type: "news" locale: "en" url: "https://longbridge.com/en/news/261413580.md" published_at: "2025-10-16T09:54:55.000Z" --- # Taiwan Semiconductor Lifts Outlook After Blowout Quarter, CEO Says AI Signals From Clients Are 'Very Strong' > Taiwan Semiconductor Manufacturing Co (TSMC) reported a strong third-quarter performance, with net sales of $33.1 billion, exceeding analyst expectations. The company attributed its success to high demand for advanced processor technologies, particularly for AI applications. TSMC's net income rose to $15.10 billion, and it provided an optimistic revenue forecast for the fourth quarter, expecting $32.20 billion to $33.40 billion. CEO C.C. Wei noted strong AI demand signals from clients, reinforcing a positive outlook for the future. TSMC stock rose 1.80% to $310.20 in premarket trading. **Taiwan Semiconductor Manufacturing Co** (NYSE:TSM) stock gained on Thursday after the contract chipmaker delivered third-quarter results that blew past analyst expectations, driven by global demand for its advanced processor technologies essential for artificial intelligence applications. As a key supplier to tech giants like **Nvidia** (NASDAQ:NVDA) for its graphics processing units (GPUs) and **Apple** (NASDAQ:AAPL) for its smartphones, the company’s strong results reflect its critical role in the industry ecosystem. The company also provided an optimistic revenue forecast for the fourth quarter. Taiwan Semiconductor reported quarterly net sales of $33.1 billion (989.9 billion New Taiwanese dollars), up 30.3% year-over-year (Y/Y), topping the analyst consensus estimate of $31.5 billion. Net sales grew 6.0% quarter over quarter (Q/Q). Net income and earnings per share were $15.10 billion (451.76 billion New Taiwanese dollars) and $2.92 (87.22 New Taiwanese dollars), up by 39.0% Y/Y, topping the analyst consensus estimate of $2.59. In U.S. dollar terms, revenue growth was 40.8% Y/Y and up by 10.1% Q/Q. The top-line performance topped the company’s guidance of $31.8 billion to $33.0 billion. ## Technology and Platform Revenue Breakdown The company stated that 3-nm technologies accounted for 23% of the total revenue, 5-nm technologies accounted for 37%, and 7-nm technologies accounted for 14%. Advanced technologies (7nm and below) accounted for 74% of total wafer revenue. By platform, High-Performance Computing (HPC) and Smartphones represented 57% and 30% of net revenue, respectively, while IoT, Automotive, DCE, and Others each represented 5%, 5%, 1%, and 2%, respectively. From a geographic perspective, revenue from customers based in North America accounted for 76% of total net revenue in 3Q25. In contrast, revenue from Asia Pacific, China, Japan, and EMEA (Europe, the Middle East, and Africa) accounted for 9%, 8%, 4%, and 3% of total net revenue, respectively. ## Profitability and Capital Spending Taiwan Semiconductor’s AI technology moat helped it expand its quarterly gross margins by 170 basis points to 59.5%, topping the company’s quarterly guidance of 55.5% to 57.5%. The operating margin expanded by 310 basis points to 50.6%, exceeding the company’s quarterly outlook of 45.5% to 47.5%. Free cash flow decreased by 60.5 billion New Taiwanese dollars to an inflow of 139.4 billion New Taiwanese dollars in the quarter, as a result of lower operating cash flow. Capital expenditures on a consolidated basis totaled $9.70 billion in the third quarter of 2025. The board approved a 5.00 New Taiwanese dollars cash dividend for the second quarter of 2025. ## Management Commentary on AI Growth “Our business in the third quarter was supported by strong demand for our leading-edge process technologies,” said **Wendell Huang**, Senior VP and CFO of TSMC. “Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies.” According to Reuters, CEO **C.C. Wei** has expressed a growing conviction in the AI megatrend, noting that demand for artificial intelligence remains stronger than anticipated. During an earnings call, Wei stated, “AI demand actually continues to be very strong, more strong than we thought three months ago.” He added that the company is receiving “very strong signals” directly from its customers’ customers, who are requesting increased capacity to support their business needs. This consistent and powerful demand further reinforces the company’s positive outlook on the future of AI. ## **Outlook** Taiwan Semiconductor guided fourth-quarter 2025 revenue of $32.20 billion to $33.40 billion, versus the $31.97 billion analyst consensus estimate. It expects a gross margin of 59% to 61% and operating profit margins of 49% to 51%. Taiwan Semiconductor stock has gained over 54% year-to-date. **Price Action:** TSM stock was trading higher by 1.80% to $310.20 premarket at last check Thursday. ### Related Stocks - [TSM.US - Taiwan Semiconductor](https://longbridge.com/en/quote/TSM.US.md) - [SOXL.US - Direxion Semicon Bull 3X](https://longbridge.com/en/quote/SOXL.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 印度 AI 實驗室 Sarvam 的新模型是對開源 AI 可行性的重大押注 | 印度人工智能實驗室 Sarvam 推出了新的大型語言模型，寄希望於開源人工智能與更大競爭對手競爭。在印度人工智能影響峯會上宣佈，這些模型包括 300 億和 1050 億參數版本，旨在用於本地語言的實時應用。它們從零開始訓練，使用了數萬億個標 | [Link](https://longbridge.com/en/news/276230007.md) | | 台積電的子公司 TSMC Global 以 2090 萬美元購買了固定收益證券 | 台積電的子公司 TSMC Global 以 2090 萬美元收購固定收益證券 | [Link](https://longbridge.com/en/news/275877998.md) | | Meta 擬部署「數百萬夥」Nvidia 晶片 進一步加強合作關係 | Meta 計劃在未來幾年內部署數百萬顆 Nvidia 的 Blackwell 與 Rubin GPU，進一步加強與 Nvidia 的合作關係。此舉將使 Meta 更多地使用 Nvidia 的 AI 處理器和網絡設備，預計將為 Nvidia | [Link](https://longbridge.com/en/news/276193053.md) | | 印孚瑟斯技術發佈 AI 優先價值框架 | Infosys 有限公司：INFOSYS - INFOSYS 推出 AI 優先價值框架 | [Link](https://longbridge.com/en/news/276131501.md) | | 用 AI 模擬新加坡教師 隨時隨地幫學生加強數學能力 \| 聯合早報網 | WizzTutor 聯合創辦人徐錦泉和張健倫利用人工智能技術創建了一個在線教育平台，旨在幫助學生隨時隨地提高數學能力。徐錦泉的創意源於他作為教師時發現學生深夜仍在學習的現象。WizzTutor 提供便捷的在線服務，學生只需使用 iPad 或 | [Link](https://longbridge.com/en/news/276220565.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.