TSMC Raises Outlook In Vote of Confidence for AI ‘Megatrend’

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. hiked its projection for 2025 revenue growth for the second time this year, reinforcing hopes in the longevity of a global boom in AI spending.

TSMC, the go-to chipmaker for Apple Inc. and  Nvidia Corp., now foresees mid-30% growth in annual sales, up about a few percentage points from previously. The outlook hike was striking given Taiwan’s biggest company last raised its guidance just three months ago, igniting a rally that’s tacked on more than $260 billion to its market value.

Most Read from Bloomberg

Affordable Housing Left Vulnerable After Trump Fires Building Inspectors HUD Issues Layoff Notices, Targeting Fair Housing Staff With Deep Cuts Los Angeles County Declares State of Emergency Over ICE Raids With Roles as Civic Hubs, Libraries Turn Over a New Page There’s a Better Way to Win on Traffic Safety

The results underscore how TSMC remains one of the bigger beneficiaries of a spending spree on AI infrastructure that’s expected to cross the $1 trillion mark in coming years. From OpenAI to Oracle Corp., industry leaders are racing to build the data centers that underpin the technology in the post-ChatGPT era. TSMC’s higher projection followed a better-than-anticipated 39% jump in net income to NT$452.3 billion ($14.8 billion) in the September quarter.

On Thursday, TSMC Chief Executive Officer C.C. Wei reiterated his industry was grappling with geopolitical uncertainty, and acknowledged how US sanctions have begun to close off swathes of China, the world’s largest semiconductor arena. Businesses across the global semiconductor supply chain are bracing for disruptions after Beijing imposed curbs on rare-earth mineral exports — essential to most technology devices — and the US responded with additional tariffs and restrictions on software sales to the Asian nation.

But Wei argued that AI demand would make up for that lost market. “Conviction in the AI megatrend is strengthening,” he told analysts after outlining earnings. “The AI demand actually continues to be very strong, stronger than we thought three months ago.”

Click here for a blog from the earnings briefing.

As the world’s most advanced manufacturer of semiconductors, TSMC plays a dominant role in an AI investment frenzy with Nvidia at its heart. The US company makes the powerful accelerators vital to the training and operation of AI services like ChatGPT and Google’s Gemini.

Yet that investment rush, coupled with a rapid climb in tech stock valuations, has drawn comparisons to the dotcom bubble given the persistent absence of mainstream AI applications and services. TSMC is in constant touch with customers to try and map out future demand and plan for capacity expansion, Wei said.

Story Continues

“Obviously there’s some question marks about the China situation, from a number of different angles,” Bloomberg Intelligence analyst Matthew Bloxham said. “But they seem very optimistic that even without China, there’s very robust demand for their platforms.” Bloomberg Intelligence’s Matthew Bloxham breaks down the numbers.Source: Bloomberg

On Thursday, TSMC raised the lower end of its capital spending target for the year. Taiwan’s largest company is now earmarking at least $40 billion for capacity expansion and upgrades in 2025, up from a floor of $38 billion previously.

What Bloomberg Intelligence Says

TSMC’s raised full-year sales growth target to mid-30% confirms growth momentum for AI chips is unabated and suggests there’s more room for the company to raise its 2- to 3-nm nodes price in 2026. Given TSMC’s dominance in leading-edge processing nodes and 2.5D packaging, we believe this price increase can be in the 5-10% range.

- Charles Shum, analyst

Click here for the research.

Much of that will go towards building capacity. The company is constructing in the US in part to alleviate trade risks.

It’s pledged to invest $165 billion ramping up manufacturing in Arizona, part of a global expansion that also encompasses Europe and Japan.

--With assistance from Vlad Savov, Cindy Wang and Gao Yuan.

Most Read from Bloomberg Businessweek

Inside the Credit Card Battle to Win America’s Richest Shoppers The Banker Behind the Trumps’ Quick Wall Street Wins A Shipwreck Killed 41 Crew and 5,900 Cattle. The Brutal Business Behind It Goes On ‘I Believe It’s a Bubble’: What Some Smart People Are Saying About AI Highest US Tariffs Since the 1930s Redraw the International Trade Map

©2025 Bloomberg L.P.

View Comments