Taiwan Semiconductor (TSM) Earnings This Thursday: Everything You Need to Know

• Taiwan Semiconductor (TSM) is set to report their Q3 FY2025 earnings this Thursday, October 16, before market open.

• TSM is up over 50% this year, driven by ever-increasing AI demand.

• TSM is a critical part of the AI production process for Nvidia, Apple, and AMD.

How TSM Got Here in 2025

TSM has had a great 2025 so far, reaping the rewards of the AI revolution as sales have accelerated and AI orders have stayed full. Their earnings calls have echoed that strength, as they have yet to miss a consensus projection for earnings per share (EPS) or revenue this fiscal year. 

The company reported $25.5 billion in revenue in Q1, $30 billion in revenue in Q2, and issued Q3 guidance of $31.8-$33.0 billion during their Q2 report. That guidance has held up into their upcoming earnings call, with analyst consensus estimates falling right into that range. 

What to Watch on Thursday

Ahead of Thursday’s call, analyst consensus estimates call for an EPS of $2.63 and revenue of $32 billion. Whether TSM exceeds or falls short of these estimates will obviously be key, but there are no shortage of other factors that could move the share price as well. 

One such factor is AI demand and TSM’s Chip-on-Wafer-on-Substrate (CoWoS) capacity. TSM has projected that their production capacity for advanced packaging will expand to 90,000 wafers/month by the end of 2025 and will reach 130,000 per month by the end of 2026. Any updates on this capacity expansion will be pivotal, as capacity tightness is a key limiter for AI accelerators. 

Demand, margins, and overseas dilution are also all critical factors for TSM ahead of Thursday’s report. Investors will be eager to hear about Apple, Nvidia, and AMD’s demand pull-through, and TSM’s previously issued Q3 guidance implies 55.5%-57.5% gross margin. Cost/price dynamics, foreign exchange effects, and any update on overseas fabrication will all play into TSM’s margins and any updates could move shares. 

Regional diversification is another key piece for TSM. They have partnered with Bosch, Infineon, and NXP to build an advanced semiconductor fabrication plant in Germany called ESMC, and they are also currently building a $23 billion advanced semiconductor fabrication plant in Kumamoto, Japan called JASM. Any timeline tweaks to these two construction projects could affect medium-term supply, and, in turn, share price. 

Furthermore, macroeconomic and policy risks are still very prevalent for TSM. Management will share their feelings on export control and supply chain constraints and any impact from geopolitical tensions; investors will be highly sensitive to any signs of AI capital expenditure moderation after a big run in 2025, and, in turn, will be highly sensitive to these factors. 

Last on the list is, of course, forward guidance. Industry trackers and company commentary point to accelerating 2025 revenue growth of around 30%, with AI leading the charge. Investors will have their eyes and ears open for any modifications to that guidance; any tightening or decrease would obviously hurt shares, while any reiteration or increase would obviously give them a boost. 

After the Print: The Road Ahead

This earnings call is obviously not going to make or break TSM’s future as a company, and there are a number of factors beyond it that investors and traders should be wary of. Chief among them is international expansion and the speed of construction of their new fabrication facilities worldwide; in addition to the aforementioned Germany and Japan facilities, TSM is also working to expand the production capacity of their multiple plants in Phoenix, Arizona. 

If their Germany and Japan facilities are both completed on time and the Arizona plant stays on its current capacity expansion schedule, TSM could boom into 2026 and beyond. If there are delays and TSM is not able to ease their fabrication bottleneck, then there could be stagnation until the schedule smooths out. 

The expected move for TSM into their earnings report is $40 wide, so the market is pricing in quite the jolt; whether it will come to the upside or the downside remains to be seen, but any trades on TSM headed into this call should be taken with a great deal of caution and risk management.

Gus Downing is host of the tastylive Network show Risk and Reward. @GainsByGus

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