Taiwan Semiconductor Manufacturing Company (TSM) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached NT$933.79 billion (US$30.1B), up 17.8% sequentially and 44.4% year-over-year, driven by strong AI and HPC demand and advanced technologies (7nm and below) accounting for 74% of wafer revenue.

• Net income was NT$398.27 billion, up 10.2% from 1Q25 and 60.7% year-over-year; diluted EPS was NT$15.36.

• Gross margin was 58.6%, slightly down sequentially due to FX and overseas fab ramp-up; operating margin improved to 49.6%.

• Shipments totaled 3,718K 12"-equivalent wafers, up 14.1% sequentially and 19.0% year-over-year.

• ROE reached 34.8%.

Financial highlights

• EPS for Q2 2025 was NT$15.36, up from NT$13.94 in 1Q25 and NT$9.56 in 2Q24.

• Free cash flow for Q2 2025 was NT$199.85 billion, down from NT$294.74 billion in 1Q25 due to higher tax payments.

• Cash and marketable securities at quarter-end were NT$2,634.43 billion.

• Capital expenditures for Q2 2025 were US$9.63 billion (NT$297.22 billion).

• Accounts receivable turnover improved to 23 days; inventory days decreased to 76.

Outlook and guidance

• Q3 2025 revenue expected at US$31.8–$33.0 billion, up 8% sequentially and 38% year-over-year at midpoint.

• Gross margin guidance: 55.5%–57.5%; operating margin: 45.5%–47.5%.

• 2025 CapEx maintained at $38–$42B.

• Full-year 2025 revenue expected to grow ~30% in USD, led by AI and HPC demand.

• Quarterly cash dividends per share increased to NT$5.00 for both Q1 and Q2 2025.