TSMC profit rises 39.1% to $14.8b in Q3 2025

TSMC reported Q3 2025 revenue of NT$989.92 billion (US$33.1 billion), with net income at NT$452.3 billion (US$14.76 billion) and diluted earnings per share at NT$17.44 (US$0.57).

The Taiwan-based chipmaker saw revenue rise 30.3% year-on-year and 6% from Q2, while net income increased 39.1% year-on-year and 13.6% quarter-on-quarter.

Gross margin stood at 59.5%, operating margin at 50.6%, and net profit margin at 45.7% for the quarter.

Sales of 3-nanometer chips accounted for 23% of total wafer revenue, 5-nanometer for 37%, and 7-nanometer for 14%.

Advanced technologies, defined as 7-nanometer and below, made up 74% of wafer revenue.

For Q4 2025, TSMC expects revenue between US$32.2 billion and US$33.4 billion, with gross margin forecast at 59% to 61% and operating margin at 49% to 51%.

🔗 Source: TSMC

🧠 Food for thought

Implications, context, and why it matters.

CoWoS capacity growth sustains TSMC’s AI revenue

Q3 2025 revenue reached $33.10 billion, with High Performance Computing (HPC) and AI at about 60% 1 2. The bottleneck moved from fabs to advanced packaging, with CoWoS (Chip-on-Wafer-on-Substrate) tight 2. TSMC targets 70,000–80,000 wafers per month by end-2025, then 100,000 in 2026 2. Q4 gross margin of 59–61% depends on easing this limit as Nvidia, AMD, and hyperscalers vie for slots 1 2.
Nvidia’s Blackwell needs about 3.3× more CoWoS reticle area than prior chips, while Rubin needs 4.0× more 2. A reticle is the lithography field that patterns interposers and redistribution layers, so more area means fewer units per pass. New 2025 lines plus Amkor, a major outsourced semiconductor assembly and test (OSAT) provider, are needed to turn wafers into AI shipments 2.

Capex will lift equipment and materials suppliers

TSMC plans $40–42 billion in 2025 capital expenditures (capex) 1. About 70% targets advanced nodes, 10–20% specialty, with the rest for advanced packaging 1. It is building six wafer plants, two advanced packaging sites, and a Research and Development (R&D) center in Arizona 3. This is the largest simultaneous fab build in industry history 3.
CoWoS output rising from about 13,000 wafers per month in 2023 to more than 100,000 in 2026 drives orders for 2.5D or 3D packaging tools 2. Materials suppliers preparing for 2-nanometer production, slated for volume in late 2025 with more tape-outs than N5 or N3 at similar stages, can time capacity and pricing 3.