TSMC Reports $10 Billion in AI Revenue for Q2, Analysts Highlight NVIDIA’s Key Chip Supplier Role

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Taiwan Semiconductor Manufacturing Company (TSMC) has experienced a significant boost in revenue thanks to its strategic partnership with NVIDIA, with analysts estimating that the company generated over $10 billion in AI-related revenue during the second quarter. This collaboration emphasizes NVIDIA’s increasing role as a pivotal customer for TSMC, previously dominated by Apple. While TSMC mainly manufactures AI graphics processing units (GPUs) for NVIDIA, it also produces other essential AI components like application-specific integrated circuits (ASICs) and high bandwidth memory controllers.

Projected 30% Revenue Growth for TSMC in 2025 Driven by AI

In its recent quarterly earnings report, TSMC announced a remarkable 61% increase in revenue, primarily fueled by the soaring demand for AI chips. The company has set a revenue target of approximately $32.4 billion for the upcoming quarter, indicating an impressive 38% growth compared to the previous year.

During the earnings call, TSMC management highlighted that advanced process technologies, primarily utilized in AI applications and high-end consumer electronics, constituted 74% of their quarterly revenue.

According to Taiwanese analysts, out of TSMC’s $31.7 billion revenue in the second quarter, about one-third—approximately $10 billion—was attributed to AI chips. Official figures from TSMC indicated that 60% of this revenue stemmed from high-performance computing (HPC) solutions, with smartphones contributing an additional 27%.

CEO Dr. C.C. Wei noted that the firm’s projected 30% annual revenue growth is mainly due to the demand for AI-led HPC, driven by TSMC’s advanced 3-nanometer and 5-nanometer chip technologies.

2Q25 Revenue by Platform: HPC 60%, Smartphone 27%, IoT 5%, Automotive 5%, DCE 1%, Others 2%. — Breakdown of TSMC’s second quarter revenue. Image courtesy of TSMC.

Beyond the substantial revenue generated in the second quarter, analysts predict that TSMC could achieve annual revenue of approximately NT$868 billion (around $29.51 billion, with 1 NT$ equating to $0.034) from AI sales by the end of the fiscal year. If these projections hold, TSMC’s AI revenue in 2025, largely driven by NVIDIA, could potentially double compared to last year’s NT$434 billion.

Furthermore, industry analysts anticipate that AI could soon account for nearly half of TSMC’s overall annual revenue. TSMC’s collaboration with NVIDIA is particularly advantageous as it remains the only contract manufacturer capable of mass-producing cutting-edge chips effectively. NVIDIA’s latest GPUs are built on TSMC’s 4-nanometer technology, which, while advanced, is two generations behind the company’s upcoming technologies.

Currently, TSMC is utilizing 3-nanometer technology for clients like Apple, and plans to commence mass production of its 2-nanometer technology later this year, reinforcing its position at the forefront of semiconductor manufacturing innovation.

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