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Investing.com-- Taiwan Semiconductor Manufacturing Co (TSMC) (NYSE:TSM, (TW:2330) posted a 60% surge in first-quarter net profit, and projected higher revenue for the upcoming quarter on strong demand for AI chips.
The world’s largest contract chipmaker posted net income of NT$361.56 billion ($11.12 billion), up from NT$225.49 billion a year earlier. The figure was above the analysts’ median estimate of NT$354.6 billion.
Revenue rose 41.6% year-on-year to NT$839.25 billion ($25.81 billion), above forecasts of NT$835.17 billion.
The company expects second-quarter revenue to be between $28.4 billion and $29.2 billion, representing a 13% sequential increase or a 38% year-on-year jump at the midpoint.
Gross margin remained resilient at 58.8%, though down 0.2 percentage points due to production disruptions from the 6.4-magnitude earthquake and initial cost dilution from its new Japan fab.
In its earnings call, TSMC noted "there are uncertainties and risks from the potential impact of tariff policies," but said it has not seen any change in its customers’ behaviour so far.
"We continue to observe robust AI-related demand from our customers throughout 2025. We reaffirm our revenue from AI accelerators to double in 2025," TSMC CEO C. C. Wei said.
The chipmaker has significantly ramped up its U.S. investment plans, unveiling a $100 billion commitment during a high-profile announcement at the White House last month.
TSMC said it expects its second-quarter gross margin to fall by 80 basis points to 58% as costs rise from ramping up its Arizona chip plant.
The chipmaker warned margin pressures will intensify through 2025, with a 2–3% annual hit from overseas fabs in Arizona and Japan’s Kumamoto. It anticipates a 3–4% annual dilution in later years, as it scales a $100 billion Arizona expansion.
The company cited today’s “fragmented globalization” as a driver of higher costs across the semiconductor industry for overseas manufacturing operations.
TSMC reiterated its fiscal 2025 capital expenditure between $38 billion and $42 billion.