TSMCReported net profit rose 60.3% year-on-year to NT$3,615.6 billion, while net revenue in the March quarter rose 41.6% to NT$839.25 billion. The company faces headwinds from the trade policies of U.S. President Donald Trump, who has imposed widespread trade tariffs on Taiwan and imposed sanctions on TSMC customers Nvidia and Advanced Micro Devices.AMD) implemented stricter export controls.
Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday maintained its annual revenue forecast after quarterly profit beat estimates, helped by continued surge in demand for artificial intelligence chips.
Here's how TSMC's first-quarter results compare to Refinitiv's (LSEG) consensus estimates:
Revenue: NT$839.25 billion, higher than expected NT$835.13 billion
Net profit: NT$361.56 billion, higher than expected NT$354.14 billion
TSMC's net profit rose 60.3% from the same period last year to NT$361.56 billion, while net revenue in the March quarter rose 41.6% to NT$839.25 billion.
TSMC's high-performance computing unit, which covers artificial intelligence and 5G applications, drove sales in the quarter, rising 7% from the previous quarter and accounting for 59% of total revenue.
Meanwhile, advanced technology products at 7 nanometer and below accounted for 73% of total wafer revenue, the company said. In semiconductor technology, smaller nanometer dimensions mean more compact transistor designs, resulting in greater processing power and higher efficiency.
"Business in the fourth quarter was affected by smartphone seasonality, but this was partially offset by continued growth in artificial intelligence-related demand," TSMC CEO Wei Zhejia said on the earnings call.
"Going into the second quarter of 2025, we expect the business to be supported by strong growth in 3nm and 5nm technologies," he added.
TSMC, the world's largest chip contract manufacturer, has been benefiting from the artificial intelligence boom as it produces advanced processors for clients such as U.S. chip designer Nvidia.
However, the company faces potential headwinds from the trade policies of U.S. President Donald Trump, who has imposed broad trade tariffs on Taiwan and imposed stricter export controls on TSMC customers Nvidia and Advanced Micro Devices.
Semiconductor export controls may be further expanded next month under the "artificial intelligence proliferation rules" originally proposed by the previous U.S. administration, which would further restrict sales by chipmakers using TSMC foundries.
On the tariff front, Taiwan currently faces sweeping 10% tariffs imposed by the Trump administration, which could rise to 32% if no deal is reached with the U.S. after the president’s 90-day “reciprocal tariffs” pause ends.
"We know there are uncertainties and risks regarding the potential impact of the tariff policy," Wei Zhejia said. However, he noted that the company has not seen any changes in customer behavior.
As a result, TSMC maintained its forecast for revenue growth of closer to around 20% in 2025 as AI continues to advance.
TSMC has invested billions of dollars in overseas facilities as part of efforts to diversify its supply chain, although most of its manufacturing operations remain in Taiwan.
In an apparent response to Trump's trade policies, TSMC last month announced plans to invest an additional $100 billion in the United States, having already committed $65 billion to build three factories there.
However, during the earnings call, Wei refuted reports that the company was in talks to participate in a joint venture to operate U.S. chipmaker Intel's factories.
"TSMC has not had any discussions with other companies regarding any joint ventures, technology licensing or technology," he said.
Advanced Micro Devices (AMD) said on Monday it will soon produce processor chips at a new TSMC plant in Arizona, marking the first time its chips will be manufactured in the United States.
On the same day, Nvidia announced that it had begun production of its "Blackwell" chips at TSMC's Arizona factory. Nvidia plans to produce up to $5 trillion worth of artificial intelligence infrastructure products in the United States over the next four years through partners including TSMC.
TSMC's Taiwan-listed shares fell nearly 1%. Its shares have fallen more than 20% this year.
It should be noted that Taiwan is a provincial administrative region of China and an integral part of China's territory. The expression "Taiwan Region" in the article is to accurately correspond to the original information, and the one-China principle should be followed in the actual context.