Amidst the gloom of the ongoing tariff war, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker and a bellwether for the industry, cheered the stock markets by posting a 60.3 per cent jump in first-quarter net profit.
Net profit for the January-March period was T$361.6 billion (US$11.12 billion), up from T$225.5 billion (US$6.93 billion) in the same period last year.
The surging demand for its artificial intelligence (AI) semiconductors not only helped TSMC beat market forecasts, the company also gave a bullish outlook for the year. It stood by its annual outlooks for sales and capital spending and forecast AI chip revenue to double.
TSMC delivers profit surge
Consolidated revenue for the quarter was at T$839.25 billion (US$25.8 billion), and diluted earnings per share of T$13.94 (US$2.12). The first quarter revenue increased 41.6 per cent, while diluted EPS increased 60.4 per cent respectively.
Revenue, however, decreased 5.1 per cent from the previous quarter. Also, its revenue from China dropped to 7 per cent of total sales from 9 per cent a year earlier, a result of US-imposed sanctions on chipmakers. North America revenue was up nearly 8 per cent to 77 per cent.
Capital expenditure for this year was expected to be between US$38 billion and US$42 billion.
For the second quarter, TSMC expects revenue of US$28.4 billion to US$29.2 billion, outpacing US$20.8 billion for the same period a year earlier. For the full year, it expects revenue growth roughly midway between 20 and 30 per cent.
TSMC’s upbeat result, announced after Taiwan stock markets closed, came a day after warnings from Nvidia and ASML that led to a global decline in chip stocks. Nvidia warned of a US$5.5 billion hit after the US restricted exports of its AI processor tailored for China. TSMC’s Frankfurt-listed shares was up 5.5 per cent in early trading.
Wendell Huang, Senior VP and Chief Financial Officer of TSMC, commented: “Our business in the first quarter was impacted by smartphone seasonality, partially offset by continued growth in AI-related demand.
“Moving into the second quarter 2025, we expect our business to be supported by strong demand for our industry-leading 3nm and 5nm technologies. While we have not seen any changes in our customers’ behaviour so far, uncertainties and risks from the potential impact from tariff policies exist. We will continue to closely monitor the potential impact on the end market demand.”
The company said shipments of 3-nanometer accounted for 22 per cent of total wafer revenue; 5-nanometer accounted for 36 per cent, and 7-nanometer accounted for 15 per cent, for a total of 73 per cent of chips shipped. However, advanced technologies, defined as 7-nanometer and more, accounted for 73 per cent of total wafer revenue.
Chief Executive CC Wei, who stood alongside President Donald Trump last month and unveiled an additional US$100 billion investment in the United States, said TSMC is not getting involved in tariff talks.
“This kind of tariff discussion is between countries. We are a private company,” Wei said.
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