TSMC Stays Bullish on 2025 as Advanced Chips Keep Orders Flowing

TSMC is signaling a stable 2025 outlook as demand for cutting-edge semiconductors stays hot, powered by the AI boom and next-gen computing needs.

Taiwan’s chipmaking juggernaut is holding firm on expectations of solid growth through next year, banking on its edge in advanced technologies to weather macroeconomic jitters and keep its foundries humming. With AI still devouring silicon by the truckload, Taiwan Semiconductor Manufacturing Co. says it’s ready for what’s next — and then some.

Betting Big on AI and HPC Demand

The chipmaker behind much of the tech world’s computing guts isn’t slowing down. TSMC says high-performance computing (HPC) and artificial intelligence (AI) are now core demand drivers, and it sees no signs of that trend cooling anytime soon.

In a statement following its first-quarter earnings report, the company emphasized its confidence in stable full-year revenue growth in 2025. AI, in particular, is expected to account for a larger chunk of wafer shipments. CFO Wendell Huang said the company is “seeing a structural increase in AI-related demand that should support long-term growth.”

One sentence says it all: AI is eating the world, and TSMC is feeding it.

Q1 Numbers Give a Taste of What’s Coming

TSMC’s first quarter profit jumped 57% year-over-year, a sharp turnaround after a slower 2023. Revenue hit $18.87 billion for the quarter, boosted by sustained AI demand and the company’s dominance in 3nm process technology.

In the same breath, the company acknowledged pockets of weakness — notably smartphones and consumer electronics — still feeling the sting of slower global growth and cautious spending.

Still, here’s what stands out:

• Net income surged to $6.9 billion.

• Operating margin improved to 42%.

• AI-related orders grew by “double digits.”

That last bullet is especially telling. Nvidia, AMD, and other TSMC clients are pushing full throttle on AI chips, and they’re all lining up at TSMC’s door.

3nm and 2nm: The Secret Sauce

TSMC isn’t just growing — it’s outpacing everyone in the nanometer race.

Its latest 3nm technology, already in volume production, is seeing strong customer adoption. Even more, it’s laying the groundwork for 2nm production, which it expects to begin in the second half of 2025.

One exec put it this way: “We’re not waiting for demand — demand is already here.”

Let’s break it down with a quick view:

Also worth noting: its CoWoS (Chip-on-Wafer-on-Substrate) packaging tech is seeing explosive growth. TSMC plans to triple CoWoS capacity by end of this year to keep up with AI chip demand.

Geopolitics Still Loom, But Strategy Helps

No discussion about TSMC is complete without a glance at the geopolitical chessboard.

The U.S.-China tech tensions haven’t gone away, and Taiwan sits squarely in the middle of it. Still, TSMC’s global expansion plans — including fabs in Arizona and Japan — are meant to hedge against political risks and client concerns over supply chain concentration.

That said, it hasn’t been all smooth sailing. The Arizona fab is delayed. Costs are ballooning. And talent shortages are real. Even so, TSMC is sticking to its strategy.

In one sentence: It’s a long game, and TSMC knows it.

Government Policy: A Helpful Hand or a Tight Rope?

Taiwan’s government has historically supported its chip sector, and TSMC has benefited more than most. From talent pipelines to R&D funding, public support has been crucial.

However, there’s growing scrutiny around how much influence policymakers should have over strategic decisions — especially as TSMC builds overseas and shifts more tech abroad.

Here’s the gist:

• Taiwan wants to keep tech leadership at home.

• TSMC wants to stay globally competitive.

• The U.S. wants secure chip access.

• China wants a seat at the table — and isn’t getting it.

What’s next? That depends on how these tensions evolve.

What 2025 Could Actually Look Like

So what does all this mean for next year?

TSMC isn’t giving concrete numbers yet, but analysts say 2025 could bring high single-digit to low double-digit revenue growth if AI trends continue and 2nm ramps smoothly.

One wild card: consumer tech demand. If smartphones and PCs pick up again, that’s bonus upside. If not, AI and HPC may have to carry the whole load.

Still, TSMC is in a good spot. Probably the best spot, actually. With nearly 60% global market share in foundry services and clients ranging from Apple to Qualcomm, it’s not just playing the game — it’s setting the rules.