TSMC profits surge despite trade concerns

Revenue rose 41.6% compared to last year, with AI-related growth offsetting seasonal dips in smartphone sales, which still account for over a quarter of TSMC’s income.
TSMC reported a 60% year-on-year profit jump in Q1 2025, driven by strong AI chip demand despite weaker smartphone sales and looming tariff threats.

Taiwan Semiconductor Manufacturing Company (TSMC) posted a significant jump in quarterly profits, driven by robust demand for AI chips. Net income rose by just over 60% year-on-year to NT$360.7bn (£9.77bn), outpacing analysts’ expectations.

Revenue also grew by 41.6% compared to the same period in 2024, although it dipped slightly from the previous quarter due to weaker smartphone sales.

The world’s largest contract chipmaker has not yet seen any major changes in customer behaviour, including from Apple and Nvidia, despite increasing uncertainty over potential US tariffs on Taiwanese semiconductors.

While concerns about trade tensions grow, particularly with former President Donald Trump suggesting the US should reclaim chip production, TSMC says it is continuing with business as usual for now.

Instead of scaling back, TSMC is expanding its investment in the US, with plans to spend up to $160bn. Analysts believe this move could help the firm argue for a more favourable position should tariff negotiations intensify.

The company’s Chief Financial Officer, Wendell Huang, acknowledged the risks posed by changing trade policies but said revenue growth is still expected in the next quarter.

Despite global pressures, TSMC remains optimistic, forecasting revenue between $28.4bn and $29.2bn. Although the company’s shares have fallen more than 20% so far this year, some analysts say the stock is now undervalued and well-positioned to rebound once market conditions stabilise.

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