TSMC first-quarter profit tops estimates, rising 60%, but Trump trade policy threatens growth

Taiwan Semiconductor Manufacturing Company on Thursday beat profit expectations for the first quarter, thanks to a continued surge in demand for AI chips.

Here are TSMC’s first-quarter results versus LSEG consensus estimates:

• Revenue: $839.25 billion New Taiwan dollars, vs. NT$835.13 billion expected
• Net income: NT$361.56 billion, vs. NT$354.14 billion 

TSMC’s net income increased 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 division which encompasses artificial intelligence and 5G applications drove sales in the quarter, increasing 7% since the last quarter to account for 59% of total revenue.

Meanwhile, the company said advanced technologies, defined as 7-nanometer and less, accounted for 73% of total wafer revenue. In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency.

“Business in the fourth quarter was impacted by smartphone seasonality, partially offset by continued growth in AI related demand,” TSMC CEO C.C. Wei said in an earnings call.

“Moving into the second quarter of 2025, we expect our business to be supported by strong growth of our 3-nanometer and 5-nanometer technologies,” he added.

As the world’s largest contract chip manufacturer, TSMC has consistently benefited from the AI boom as it produces advanced processors for clients such American chip designer Nvidia.

However, the company faces potential headwinds from the trade policy of U.S. President Donald Trump, who has placed broad trade tariffs on Taiwan and stricter export controls on TSMC clients Nvidia and AMD.

Semiconductor export controls could also be expanded next month under the “AI diffusion rules” first proposed by the Biden administration, further restricting the sales of chipmakers that use TSMC foundries.

On the tariff front, Taiwan currently faces a blanket 10% levy from the Trump administration and that could rise to 32% after the President’s 90-day pause of his “reciprocal tariffs” ends unless it reaches a deal with the U.S.

“We understand there are uncertainties and risks from the potential impact of tariff policies,” Wei said, noting, however, that the company has yet to see any changes in customer behavior.

Therefore, TSMC has maintained its forecast of close to mid-20% revenue growth in 2025 amidst continued AI development.

As part of efforts to diversify its supply chains, TSMC has been investing billions in overseas facilities, though the lion’s share of its manufacturing remains in Taiwan.

In an apparent response to Trump’s trade policy, TSMC last month announced plans to invest an additional $100 billion in the U.S. on top of the $65 billion it has committed to three plants in the U.S.

However, on the earnings call, Wei dispelled reports that the company is in discussions about entering a joint venture that would operate factories of U.S. chipmaker Intel.

“TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology,” he said.

On Monday, AMD said it would soon manufacture processor chips at one of the new Arizona-based TSMC facilities, marking the first time that its chips will be manufactured in the U.S.

The same day, Nvidia announced that it has already started production of its Blackwell chips at TSMC’s Arizona plants. It plans to produce up to half a trillion dollars of AI infrastructure in the U.S. over the next four years through partners, including TSMC.

Taiwan-listed shares of TSMC fell nearly 1%. Shares have lost over 20% so far this year.