Taiwan Semiconductor Manufacturing Co., the world’s biggest producer of semiconductor chips, raised its full-year revenue forecast on Thursday on a bullish outlook for spending on artificial intelligence after posting a record profit that blew past market estimates. These results underscore the company’s faith in AI, brushing off concerns about it being a bubble, for now.
TSMC said it expects robust AI demand to continue, as it raised its 2025 revenue guidance to mid-30% growth in U.S. dollar terms from around 30%, and maintained its forecast for capital spending at up to $42 billion for 2025.
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“AI demand actually continues to be very strong — more strong than we thought three months ago,” CEO C.C. Wei said in an earnings call. He added, “We are also happy to see a continuous strong outlook from our customers. In addition, we directly receive very strong signals from our customers requesting the capacity to support their business. Thus, our conviction in the AI megatrend is strengthening.”
There has been a rise in deals of late between AI firms and chipmakers. OpenAI recently inked a deal with Broadcom to jointly build and deploy 10 gigawatts of custom AI accelerators as part of a broader effort across the industry to scale AI infrastructure. While the companies have been working together for 18 months, they’re now going public with plans to develop and deploy racks of OpenAI-designed chips starting late next year.
OpenAI is also partnering with AMD to deploy six gigawatts of the semiconductor company’s artificial intelligence chips. It has also inked a similar deal with Nvidia for 10 gigawatts of computing power. Nvidia, AMD and Broadcom all rely on TSMC for chip production.
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These investments have raised concerns over the formation of a bubble similar to the dotcom bubble with securities investors on guard for signals that demand is tailing off or that the massive spending is not paying off as anticipated. However, recent announcements indicate the demand is resilient.
TSMC posted a 39.1% jump in third-quarter net profit and said it would be prudent in its business planning going into 2026. It also reported that net profit for July-September climbed to $14.76 billion.
“We are still very comfortable that the demand on leading-edge semiconductors is real. And as I continue to say that we look at all the demand and look at our capacity expansion, TSMC needs to work very hard to narrow the gap,” Wei said, referring to supply and demand.