TSMC Releases Q1 Finance Report, Surpasses Revenue Forecasts Amidst Trump Tariffs

Taiwan Semiconductor Manufacturing Company (TSMC) has held on to its revenue forecasts for 2025, CNBC reported. This happened after its Q1 results surpassed profit expectations. TSMC’s finance report showed the chip manufacturer’s Q1 revenues stood at NT$839.25 billion compared to the NT$835.13 billion projected. The company attributed the increase to surging TSMC AI chip demand.

Rising Net Income

TSMC is the largest contract semiconductor maker in the world. The company has been benefiting from the AI boom, manufacturing advanced processors for US big techs like Nvidia.

Taiwan Semiconductor Q1 results show the company’s net income amounted to NT$361.56 billion. This amount represented a 60.3% growth from the same quarter last year.

TSMC’s net revenue for the quarter increased by 41.6% to hit the NT$839.25 mark. 59% of this revenue was generated by the high-performing computing division of TSMC. Revenue from this division, which encompasses 5G applications and artificial intelligence, increased by 7%.

TSMC said advanced technologies, which are 7-nanometer and below, contributed 73% of the total revenue generated from wafers. In the chip industry, low nanometer sizes signify highly compact transistor designs. This results in more efficiency and higher processing power.

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

Changing Trade Policies

The ongoing global trade war could have a significant impact on TSMC’s growth. The Taiwanese company faces headwinds from the trade policies adopted by US President Donald Trump. The US has placed wide trade tariffs on Taiwan. Currently, the US has placed a 10% blanket tariff on Taiwan. This levy could increase to 32% after Trump’s 90-day pause on reciprocal tariffs lapses without a deal.

“We understand there are uncertainties and risks from the potential impact of tariff policies,” Wei said.

He however added that TSMC is yet to note a change in customer behavior. This is why TSMC expects strong revenue growth in 2025 of about 20%. While the impact of Trump’s trade policy on TSMC’s growth remains unclear, the recent announcement on strict AI chip export controls on top customers, including Nvidia and Advanced Micro Devices
(AMD) could dip chip sales.

The government could expand chip export restrictions this coming month by implementing the AI diffusion rules. These rules were first proposed by the Biden administration. If the US decides to implement them, it could reduce sales of chip manufacturers that rely on TSMC foundries.

Diversifying Supply Chains

TSMCs has been working to diversify its supply chains by investing billions of dollars in construction of production facilities overseas. However, the company maintains a big portion of its production in Taiwan. Last month, the company announced plans to set up three production plants in the US through a $100 billion investment, in addition to a previous $65 billion commitment made last year.

The company reportedly pitched the idea of taking stakes in a joint venture to run Intel factories to US chip designers Broadcom, Nvidia, and AMD. Wei refuted these claims during the earnings call.

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

On April 14, Nvidia said that it has commenced production of Blackwell AI chips at the TSMC-owned Arizona plants. In the next five years, the US chip maker plans to work with partners like TSMC to manufacture about $500 billion worth of AI infrastructure in the US. AMD also announced plans to start producing processor chips in one of TSMC’s facilities in Arizona. This will be the first time the chip maker produces chips on US soil.