TSMC Q3 Revenue Surpasses Expectations
According to media reports, TSMC is expected to exceed market expectations for U.S. dollar revenue in Q3 2025, with strong order demand anticipated to continue into Q4. Despite ongoing uncertainty around semiconductor chip tariffs, stable exchange rates and robust restocking from clients in smartphones and high-performance computing (HPC) sectors are providing solid support for TSMC's performance.
Market analysts note that TSMC's full-capacity orders in 5nm and 3nm nodes, alongside the gradual ramp-up of 2nm production, could drive over 30% year-on-year growth in U.S. dollar revenue for 2025. The company previously forecasted Q3 revenue between $31.8 billion and $33 billion, with a full-year target of $117.104 billion—potentially surpassing the $100 billion milestone for the first time. If Q3 hits the top end at $33 billion, Q4 revenue is projected around $28.504 billion, a sequential decline of roughly 10%.
TSMC's leadership in the global foundry market remains strong. While Samsung Electronics and Intel continue to struggle with losses in their foundry businesses, TSMC retains near-monopoly control over advanced nodes below 7nm. Its $165 billion U.S. investment in six wafer fabs, two advanced packaging facilities, and a research center also helps mitigate potential tariff risks.
Profitability continues to shine. TSMC forecasts Q3 gross margin between 55.5% and 57.5%, with operating margin around 45.5% to 47.5%. With exchange rates stabilizing, Q4 gross margins are expected to remain above 55%.
In contrast, UMC and Vanguard show greater sensitivity to currency fluctuations. UMC expects Q3 2025 demand to remain flat, aiming to maintain full-year revenue and profit levels. Vanguard reported a Q2 2025 after-tax net profit of NT$2.043 billion, down 15.4% sequentially, with gross margin slipping to 28%.
SMIC posted a net profit of RMB 2.3 billion in H1 2025, up nearly 40% year-on-year, with a 21.9% gross margin, though growth excluding government subsidies is limited. Hua Hong, facing pricing pressure on mature nodes, saw profits drop sharply by 72% in the first half of 2025.
