[News] TSMC Projects Q4 Sales Down 1% QoQ, Up 22% YoY with 60% Margin, Holds $40-42B 2025 Capex

After posting new high net profit in the third quarter, TSMC expects Q4 revenue to range between US$32.2 billion and US$33.4 billion, based on its current business outlook. Assuming an exchange rate of NT$30.6 to the U.S. dollar, management forecasts a gross profit margin of 59% to 61% and an operating profit margin of 49% to 51%.

To be more specific, TSMC guided fourth-quarter revenue to decline 1% QoQ but rise about 22% YoY at the midpoint.

Notably, TSMC’s Q3 gross margin almost reached 60%. According to CFO Wendell Huang, gross margin in Q3 expanded notably thanks to cost improvements and higher utilization, though overseas fabs and FX effects slightly diluted the gain. Still, the margin beat expectations by about 200 basis points, supported by a stronger NT$29.91 exchange rate versus the expected NT$29, he added.

Looking ahead, TSMC’s Q4 gross margin is expected to reach around 60%, benefiting from favorable FX, even as overseas operations continue to weigh slightly, according to TSMC.

Amid robust AI demand, TSMC reaffirmed its 2025 capex guidance at US$40–42 billion, slightly narrowed from the prior US$38–42 billion range. Around 70% of the spending will go to advanced process technologies, 10–20% to specialty processes, and the remainder to advanced packaging and other segments, according to CFO Wendell Huang.

TSMC today announced consolidated revenue of NT$989.92 billion, net income of NT$452.30 billion, and diluted earnings per share of NT$17.44 (US$2.92 per ADR unit) for the third quarter ended September 30, 2025.

Gross margin for the quarter was 59.5%, operating margin was 50.6%, and net profit margin was 45.7%.

(Photo credit: TSMC)