Taiwan Semiconductor Manufacturing Co. (TSMC) has reported a sharp rise in quarterly profit, underscoring how artificial intelligence (AI) is rewriting the dynamics of global chip supply chains.
The 39% jump in net income to NT$452.3 billion ($14.8 billion) in the September quarter exceeded analysts’ forecasts of NT$405.5 billion, as the company continued to benefit from an unprecedented wave of AI-driven investment by technology giants including OpenAI, Nvidia, and Oracle.
This surge, alongside a 30% increase in revenue earlier reported by the chipmaker, highlights how the post-ChatGPT era is accelerating capital flows into semiconductor production and data-centre infrastructure worldwide.
Analysts now see AI-related investments crossing the $1 trillion mark in the coming years, fuelling comparisons to the early-2000s dotcom boom.
AI reshapes semiconductor priorities
TSMC’s performance underscores its strategic position at the centre of this AI-led transformation.
As the exclusive manufacturer of Apple’s iPhone processors and supplier of Nvidia’s high-end AI accelerators, the firm has become indispensable to the AI ecosystem. Its chips power models like ChatGPT and DeepSeek, which have driven a surge in demand for advanced semiconductors.
In July, TSMC raised its 2025 revenue growth forecast to around 30%, citing sustained orders from major clients. However, consumer demand for electronic devices remains mixed due to ongoing global economic uncertainty and trade tensions between the US and China.
Global tensions and the AI supply chain
The geopolitical backdrop is increasingly shaping production strategies. The US-China trade conflict has intensified, with Washington imposing new restrictions on software and semiconductor exports while Beijing has moved to curb shipments of rare-earth minerals critical to chipmaking.
These policies have created supply-chain vulnerabilities that companies like TSMC must navigate carefully.
To reduce its exposure, TSMC is diversifying its operations. The company has allocated between $38 billion and $42 billion for capital spending this year and pledged a total of $165 billion to expand manufacturing in Arizona.
Additional plants in Europe and Japan form part of this wider global footprint aimed at balancing political and economic risks.
Rising demand strengthens industry momentum
Suppliers across the semiconductor ecosystem are experiencing similar momentum. ASML Holding NV, which provides advanced lithography machines to TSMC, reported surging demand for its most sophisticated systems due to the AI boom.
Bloomberg experts said TSMC’s preliminary third-quarter sales of NT$990 billion ($33.05 billion) implied gross margins near the upper end of its 55.5–57.5% guidance range.
They expect this strength to continue into the final quarter, supported by orders for Apple’s A19 chips and Nvidia’s Blackwell series.
Although a modest seasonal dip is expected, TSMC’s underlying growth remains strong, with full-year sales likely to stay near the 11% pace projected earlier.
Chief Executive C.C. Wei has expressed confidence in AI’s long-term growth trajectory but continues to warn of uncertainty linked to trade tariffs and global political frictions.
As AI adoption deepens and nations compete for semiconductor self-sufficiency, TSMC’s results illustrate how technological demand is redrawing industrial maps and redefining global economic alliances.
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