Taiwan Semiconductor Manufacturing Co. maintained its full-year revenue forecast and reported a stronger-than-expected 60% jump in first-quarter net profit, bolstered by robust demand for AI chips even as it faces escalating trade tensions under President Donald Trump's tariff regime.
The world's largest contract chipmaker said Thursday its net income for the January-March quarter rose to NT$361.56 billion ($11.1 billion), outpacing LSEG SmartEstimate projections of NT$354.14 billion. Revenue increased 41.6% to NT$839.25 billion, beating expectations of NT$835.13 billion.
"Business in the fourth quarter was impacted by smartphone seasonality, partially offset by continued growth in AI-related demand," CEO C.C. Wei said on the 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."
High-performance computing, including AI and 5G chips, accounted for 59% of revenue, while advanced technologies - defined as 7-nanometer and below - made up 73% of wafer sales. The company expects AI-related chip revenue to double this year.
TSMC maintained its guidance of mid-20% revenue growth in 2025 and projected second-quarter revenue between $28.4 billion and $29.2 billion, up from $20.8 billion a year ago. Capital expenditure will remain in the range of $38 billion to $42 billion.
Despite geopolitical headwinds, including the Biden-era "AI diffusion" rules and Trump's proposed tariffs of up to 32% on Taiwan goods, TSMC said it has seen no material change in customer behavior. "We certainly are mindful of the potential impact from all the recent tariff announcements," Wei said. "Having said that, we have not seen any change in our customers' behaviour so far."
The company recently announced a $100 billion addition to its U.S. investment, bringing its total commitment to $165 billion across three Arizona plants. Wei confirmed that 30% of TSMC's capacity for its most advanced 2-nanometer chips would eventually be located in the U.S.
Wei dismissed speculation that the company might pursue joint ventures or licensing agreements with Intel, saying, "TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology."
Revenue from China dropped to 7% of total sales, down from 9% a year earlier, while North America grew to 77%, up from 69%, reflecting both U.S. controls on chip exports to China and a broader geographic rebalancing.
U.S. clients such as AMD and Nvidia have already begun producing chips through TSMC's Arizona facilities. Nvidia recently started production of its Blackwell AI chips at the site and plans to produce up to $500 billion in AI infrastructure over the next four years.
TSMC's Taipei-listed shares are down nearly 20% year-to-date, their worst start in over 30 years, as foreign investors have sold $8.66 billion worth of stock in 2025, reversing two years of inflows. Global chip stocks have been under pressure due to concerns about the sustainability of AI infrastructure spending and increased competition from low-cost Chinese entrants like DeepSeek.
