CaliToday (16/10/2025): Riding a tidal wave of demand for advanced semiconductors, Taiwanese tech titan TSMC announced a record-breaking net profit for the third quarter on Thursday, a clear testament to its unrivaled position at the heart of the global AI and smartphone revolutions.
Taiwan Semiconductor Manufacturing Company, the world's largest and most advanced contract chipmaker, revealed that its net profit for the three months ending in September surged an astonishing 39.1 percent year-on-year to NT$452.3 billion (US$14.7 billion). The figure not only set a new quarterly record for the corporate giant but also comfortably surpassed the NT$406.67 billion forecast by a Bloomberg News survey of analysts. Third-quarter revenue also jumped 30 percent, similarly outperforming expectations.
The engine behind this explosive growth is the insatiable global appetite for the powerful microchips that are the lifeblood of artificial intelligence and premium consumer electronics. TSMC's marquee clients, including AI powerhouse Nvidia and tech behemoth Apple, are pouring billions into servers, data centers, and new devices like the latest iPhone, all powered by TSMC's cutting-edge silicon.
The sheer strength of this demand has even taken the company's leadership by surprise.
"AI demand actually continues to be very strong -- stronger than we thought three months ago," TSMC Chairman and CEO CC Wei confirmed during an investor briefing.
This stellar financial performance comes amid intensifying geopolitical friction. TSMC finds itself at the epicenter of the escalating tech rivalry between Washington and Beijing. Concerns over U.S. export restrictions designed to hobble China's tech ambitions, coupled with Beijing's own retaliatory curbs on rare earth exports, have cast a shadow of uncertainty over the global supply chain.
Despite these headwinds, Wei projected confidence, suggesting that the AI boom is a force of nature that will persist even if the vast Chinese market becomes inaccessible. He asserted that even in such a scenario, "AI growth will be very dramatic" and "very positive."
The scale of the AI investment frenzy is staggering. According to research firm Gartner, AI-related spending is projected to hit approximately $1.5 trillion by 2025 and soar past $2 trillion in 2026—a figure equivalent to nearly two percent of the entire global GDP.
Analysts point to TSMC's unique technological supremacy as the key to its success. "It's not just Apple's new iPhone driving sales. AI clients like Nvidia and AMD are ramping up orders for high-end chips as well," Dilin Wu, a research strategist at Pepperstone, told AFP. "It shows TSMC's technology and capacity are still hard to replicate, and that underpins both margins and valuations for the company."
Looking ahead, Wu suggested that the threat of further trade restrictions could trigger a short-term surge in demand. Companies, particularly "AI chip and GPU clients... in the Chinese market," might "pull forward shipments to avoid restrictions, so basically front-running the tariffs."
TSMC's dominance has profound geopolitical implications. The concentration of the world's most advanced chip production on the island has long been dubbed a "silicon shield"—a theory that its critical role in the global economy would deter an attack by China, which claims Taiwan as its territory, and incentivize U.S. protection.
This strategic importance has led Washington to actively pressure Taipei to diversify its manufacturing footprint. While TSMC has committed to a massive US$100 billion investment in new facilities in the United States, recent comments from U.S. Secretary of Commerce Howard Lutnick revealed a rejected proposal for a 50-50 split in chip production between Taiwan and the US, highlighting the ongoing tensions over control of this vital industry.
For now, TSMC stands at the pinnacle of its industry, turning the digital gold rush of AI into record profits. Yet, it does so while navigating the treacherous currents of a global power struggle, where its silicon wafers are as much a strategic asset as a commercial product.
