TSMC jumps 5% after 34% revenue surge in August as AI chip demand increases

Taiwan Semiconductor Manufacturing Corp (NYSE: TSM) saw a 5% rise in share price on Wednesday after posting a sharp increase in August sales, underscoring the chipmaker’s dominant role in the artificial intelligence (AI) supply chain.

The world’s largest contract chipmaker reported that monthly revenue jumped nearly 34% year-on-year, driven by surging demand for high-performance processors used in AI applications.

Strong monthly and year-to-date growth

TSMC said its August revenue climbed 33.8% to T$335.77 billion ($11.09 billion), marking one of the strongest growth rates in recent months.

On a sequential basis, sales increased 3.9% compared to July, pointing to steady momentum heading into the third quarter.

For the first eight months of 2025, the company reported total revenue of T$2.43 trillion, representing a 37.1% rise from the same period last year.

The robust figures highlight TSMC’s continued ability to capture demand across multiple end markets, particularly as AI spending accelerates globally.

Earnings in the first half of the year also reflected outsized growth, supported by strong order flows from global technology leaders racing to expand their AI infrastructure.

Demand from AI hyperscalers drives momentum

Much of TSMC’s recent success has been fueled by Wall Street’s so-called AI hyperscalers — a group of mega-cap technology firms investing hundreds of billions of dollars into data centers and advanced processors.

These companies have become the primary drivers of semiconductor demand, with AI programs requiring massive computing power to run effectively.

A key beneficiary of this trend is NVIDIA Corporation (NASDAQ: NVDA), a leading maker of AI processors and one of TSMC’s largest clients.

Nvidia recently reaffirmed its bullish outlook on AI chip demand, a signal that continues to ripple through TSMC’s order book.

Beyond server chips, TSMC has also pointed to signs of a recovery in consumer electronics demand.

The segment, which had been sluggish in recent quarters, is expected to contribute more meaningfully in the months ahead as global device shipments stabilize.

Challenges from US-China trade tensions

While AI-related demand provides a strong tailwind, TSMC faces potential challenges from ongoing trade frictions between Washington and Beijing.

Recent reports indicated that the US government revoked TSMC’s authorization to freely ship essential chipmaking equipment to its Chinese factories.

The move could complicate the company’s operations in the mainland and restrict its flexibility in serving Chinese clients.

Despite these geopolitical headwinds, investor sentiment remains positive.

Shares of TSMC surged 5.45% to $264.58 on Wednesday.

At the time of writing, the stock was trading at $261.30.

TSMC’s shares have gained 32% in the year so far, overperforming the benchmark index S&P 500’s 11% gain in the same time frame.

The rally reflects Wall Street’s confidence in TSMC’s capacity to navigate regulatory risks while continuing to benefit from the AI-driven demand cycle.

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