Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, just delivered a stunning earnings report that has tech investors buzzing. In the first quarter of 2025, the chip giant posted a 60% jump in net profit, far exceeding analysts’ expectations — all thanks to the surging demand for chips powering artificial intelligence (AI).
Despite rising tensions over U.S. tariffs and new export restrictions aimed at China, TSMC remains confident. The company reaffirmed its full-year revenue and capital spending outlook, showing that it’s not backing down in the face of geopolitical uncertainty.
In a conference call, CEO C.C. Wei acknowledged the potential impact of the latest U.S. tariff threats, particularly from former President Donald Trump. However, he made it clear: TSMC hasn’t observed any behavioral changes from customers and continues to see strong demand, especially for AI-related chips.
“We’re fully aware of the recent tariff developments,” Wei said. “But we haven’t seen any slowdown or order changes from our customers. So for now, our projections stay the same.”
Wei also emphasized that TSMC is staying out of political debates, stating, “Tariff negotiations are matters between governments — we’re a private company.”
This comes after TSMC announced a $100 billion investment in U.S. manufacturing, a move aimed at reducing supply chain risks and strengthening ties with major American clients like AMD and Qualcomm. Wei also confirmed that 30% of production for its latest 2-nanometer chips will be based in Arizona once the U.S. plants are operational.
Financial highlights of the report include:
Q1 2025 net profit: T$361.6 billion ($11.1 billion), up 60% year-on-year
Expected Q2 revenue: Between $28.4 billion and $29.2 billion
Full-year growth: Forecast between 20% and 30%
Capital expenditure: Maintained at $38–$42 billion
The AI boom has been a major driver of TSMC’s success. The company expects its AI chip revenue to double this year, even as broader economic concerns and competition from Chinese AI startups like DeepSeek loom in the background.
While some chipmakers like ASML are voicing concerns about long-term demand uncertainty due to tariffs, TSMC is taking a different tone — one of cautious optimism. Even with challenges such as tighter U.S. export controls and investor skepticism, TSMC appears well-positioned to navigate the storm.
Interestingly, TSMC’s revenue from China dropped from 9% to 7%, while North American sales jumped from 69% to 77%. This shift indicates that U.S. market demand is compensating for the reduced Chinese business.
TSMC’s Frankfurt-listed shares jumped 5% on the news, though its Taipei-listed stock is still down 20% for the year — the worst performance in decades due to foreign investors pulling out.
Still, with AI demand soaring and a robust expansion strategy underway, TSMC is clearly signaling that it’s ready for the future — tariffs or not.
