TSMC's second-quarter profit soars nearly 61% as AI chip demand stays strong

Taiwan Semiconductor Manufacturing Company (TSMC) has announced a stunning nearly 61% increase in profit for the second quarter compared to the previous year, surpassing expectations and reaching a new record high. The surge in profit is largely attributed to the robust demand for artificial intelligence chips. In the June quarter, TSMC's net revenue climbed 38.65% year-over-year, totaling NT$933.80 billion, which also exceeded forecasts. As the largest contract chip manufacturer globally, TSMC has been at the forefront of the AI boom, reaping significant benefits from producing sophisticated processors for major clients like Nvidia and Apple. Despite this success, TSMC is not without challenges. The company may encounter obstacles due to the U.S. trade policies under President Donald Trump, who has indicated the possibility of imposing substantial "reciprocal tariffs" on Taiwan. Following the announcement of a 32% tariff in April, Taiwan is currently engaged in trade negotiations with the U.S. Additionally, Trump has recently cautioned that further tariffs on semiconductors might be on the horizon. U.S. export controls have also hindered TSMC's operations with China, affecting its key partners, including Nvidia and AMD. However, in a sign of improving trade relations between the U.S. and China, both Nvidia and AMD revealed earlier this week that they received assurances from the government, allowing them to continue shipping products to China.