TSMC Set to Post 54% Profit Surge Amid Trump Trade Policy Concerns

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s top contract chipmaker, is expected to report a strong 54% rise in its first-quarter profit this Thursday, driven by high demand for advanced chips used in artificial intelligence (AI) products. With major clients like Apple and Nvidia, TSMC has seen a surge in orders as companies continue to integrate AI features into their devices and services.

Analysts predict that net profit of TSMC for January to March 2025 is projected to reach T$347.8 billion ($10.74 billion). This increase is a significant jump from T$225.5 billion in the same period last year. However, the company’s future outlook may face challenges due to evolving U.S. trade policies under Donald Trump.

While Trump has praised Taiwan’s chip leadership, he has also threatened tariffs on companies that do not move production to the U.S. He recently warned TSMC of a potential 100% tax unless it expands its U.S. operations. This comes despite the company’s earlier commitment of a $100 billion investment in U.S. semiconductor facilities, including three plants in Arizona.

TSMC is planning to increase investment in overseas factories to reduce geopolitical risk. Analysts believe this could slightly affect profit margins, but it would help the company maintain strong relations with the U.S. government and avoid major trade penalties.

TSMC is also at risk from any disruption in iPhone sales, as many of its chips power Apple’s devices, which are mainly made in China.

The company recently reported a better-than-expected revenue for Q1 in Taiwan dollars. The updated outlook for the current quarter and full year, including capital spending plans, will be shared by the contract chipmaker during its upcoming earnings call. It had earlier projected capital expenditure for 2025 between $38 billion and $42 billion.

Source: The Economic Times