Taiwan Semiconductor Manufacturing Company (TSMC) reported a 61% year-on-year rise in second-quarter profit, hitting a record high and beating estimates. They forecast third-quarter revenue between $31.8 billion and $33.0 billion, a 38% year-over-year increase. TSMC’s net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, also beating estimates.

TSMC’s high-performance computing division, which includes AI and 5G applications, drove second-quarter sales, contributing 60% of revenue. They have benefited from the AI megatrend by manufacturing advanced AI processors for clients like Nvidia and Apple. Advanced chips accounted for 74% of TSMC’s total wafer revenue in the quarter.

The company faces potential headwinds from U.S. President Donald Trump’s trade policy, threatening reciprocal tariffs on Taiwan. Taiwan is in trade talks with the U.S., facing 32% tariffs announced in April. U.S. export controls have also restricted TSMC’s business with China and its key clients like Nvidia and AMD.

TSMC expects full-year 2025 revenue to rise by around 30%, supported by growth in AI and demand for advanced technologies. They have not seen changes in customer behavior yet in the second half of 2025, but uncertainties and risks remain from potential tariff policies. Other challenges include Taiwan dollar appreciation and potential order cuts from smartphone and PC clients due to global macro conditions.

Read more at CNBC: TSMC profit surges 61% to record high fueled by AI chip demand