15 October 2025
If you are covering the latest financial results from TSMC, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
"TSMC remains in an envious position with a strong set of results setting up what looks to be another positive year. Gross margins of 66% reflect a business that is seeing growing demand, assuaging any fears that the AI trade might slow down in the immediate future. The company has not provided a guide for the year ahead, but TSMC is able to have a good indication of what its customers are doing, and crucially what its customers’ customers, i.e. the hyperscalers, are doing. That sight down the value chain means they can see a continued strong capex outlook and that they can have strong conviction on AI and its adoption.
"TSMC is seeing particularly strong adoption around AI assistance, agentic AI and open source architecture, as well as CPUs. Because it has such good visibility across the industry, TSMC is able to have sway over the data centre build out that is ongoing, checking power constraints and what its customers need. It really has established itself as the trusted partner for chips.
"We continue to see how much impact there will be from the Terafab project, as well as the Intel relationship, though both are at early stages. Regardless, overall TSMC remains a world class company in a very strong position and the shares are not seeing an expensive valuation, so investors can continue to benefit in the times ahead."
