Nvidia Resumes AI Chip Sales to China, Boosting TSMC's Financial Outlook
Nvidia's lifted U.S. restrictions on AI chip sales to China positively impact TSMC's financial performance.
Key Points
- • Nvidia resumes H20 AI chip sales to China after U.S. export restrictions lift.
- • TSMC reports a 60.7% increase in net profit for Q2 2025, amounting to NT$398.3 billion.
- • Revenue for TSMC rises by 39% year-on-year, exceeding forecasts.
- • TSMC's C.C. Wei describes Nvidia's sales to China as beneficial for both companies.
Nvidia has announced the resumption of its H20 AI chip sales to China following the lifting of U.S. export restrictions, a decision that is signaling a positive shift in the semiconductor landscape. This development is expected to substantially enhance the financial performance of Taiwan Semiconductor Manufacturing Company (TSMC), which is the world's largest contract chipmaker and heavily relies on Nvidia's chip production.
In its latest quarterly report, TSMC revealed a staggering 60.7% increase in net profit for the second quarter of 2025, reaching NT$398.3 billion (around $13.5 billion). This impressive profit surge surpassed analyst expectations of NT$376.97 billion. Additionally, TSMC reported a revenue increase of 39% year-on-year, reflecting a strong ongoing demand for AI technology—a sentiment echoed by TSMC chairman C.C. Wei who remarked that demand for chips remains robust and crucial for the generative AI sector.
The lifting of U.S. restrictions on Nvidia allows for increased sales to China, a market seen as pivotal for boosting Nvidia and TSMC's business prospects. Wei described this news as ‘very positive’ and emphasized that both companies stand to gain significantly from the renewed access to China's vast market, which could further accelerate TSMC's revenue growth in the upcoming quarters.
As part of this economic interplay, Taiwan is currently in talks with the U.S. to negotiate potential tariffs that could impact exports, including a significant 32% tariff on chips set to be enforced by August 1. Wei noted that while such tariffs pose potential risks due to increased costs leading to reduced demand, he remains optimistic about TSMC's growth trajectory. To strengthen its bargaining position, Taiwan has committed to increasing its investments in the U.S., and further enhancing its defense spending, alongside purchasing more American energy.
In summary, Nvidia's resumption of chip sales to China is not only promising for the tech giant but is also expected to propel TSMC's financial results onwards—a noteworthy development amid the current geopolitical landscape.