Taiwan Semiconductor Manufacturing Company (TSMC) boosts projected revenue expansion
In a significant development, Taiwan Semiconductor Manufacturing Company (TSMC) is poised to experience a substantial increase in chip demand and revenue following the lifting of US export restrictions on Nvidia's H20 AI chip sales to China.
The news has sent TSMC's shares soaring by 3%, reflecting investor confidence in the chipmaker's future demand and revenue, as reported by various financial news outlets. This positive sentiment is shared by TSMC chairman C.C. Wei, who described the renewed chip sales to China as very positive for both Nvidia and TSMC.
Nvidia, one of TSMC's largest customers, had previously been affected by the export ban on the H20 chip, leading to a substantial loss for the company. The lifting of these restrictions now allows for the resumption of chip exports to a large market—China—which is expected to result in a strong surge in demand.
The renewed chip sales to China support TSMC’s already robust growth outlook. In fact, TSMC has raised its 2025 sales growth forecast to about 30% in US dollar terms, up from a previous forecast of mid-20%. This impressive growth is underpinned by ongoing strong demand for AI-related chips, including those from Nvidia.
TSMC's strong Q2 performance, with a 60.7% year-on-year rise in net profit and a 39% revenue increase, was linked to sustained AI technology demand. This demand is expected to remain robust with Nvidia’s renewed China shipments.
The chipmaker also projected Q3 revenue growth of about 8% sequentially, or 38% year-on-year, indicative of continued momentum likely supported by resumed Nvidia China sales.
TSMC's chairman and CEO, C.C. Wei, also mentioned Nvidia's CEO, Jensen Huang, in reference to AI demand. Wei stated that recent developments are positive for AI's long-term demand outlook.
In summary, the removal of US export restrictions on Nvidia’s H20 chip to China is likely to boost TSMC’s chip demand and revenue significantly, reinforcing its strong growth trajectory in 2025 amid burgeoning AI technology spending. This development underscores the interconnected nature of the global semiconductor industry and the potential for mutual growth and success when barriers to trade are removed.
Data-and-cloud-computing developments, such as artificial-intelligence (AI), are catalysts driving the strong growth of TSMC in 2025. The use of AI technology in Nvidia's H20 chips, a significant portion of TSMC's business, is expected to fuel a surge in demand and revenue following the removal of US export restrictions to China.
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