Taiwan Semiconductor Manufacturing Company (TSMC) reported first-quarter earnings that outstripped analyst forecasts, driven by surging appetite for advanced AI chips. Nonetheless, looming U.S. tariffs and tightening export controls cast uncertainty over the world’s largest contract chipmaker.
For the March quarter, TSMC posted net revenue of NTD 839.25 billion ($26 billion), marginally ahead of LSEG consensus estimates of NTD 835.13 billion. Net profit soared 60% year-on-year to NTD 361.56 billion, comfortably beating expectations.
Revenue surged 41.6% from the same period a year prior, underscoring strong demand from clients such as Nvidia and AMD for the company’s leading-edge manufacturing technologies. Advanced manufacturing processes—7 nanometer and below—accounted for a robust 73% of the company’s total wafer revenue.
Despite these strong results, TSMC finds itself navigating mounting geopolitical and policy headwinds. U.S. President Donald Trump has imposed tariffs as high as 10% on Taiwanese goods, with the specter of a further increase to 32% if a new trade agreement isn’t reached after a 90-day review period.
Additionally, stricter semiconductor export controls targeting key clients including Nvidia and AMD threaten to stifle future growth.
There is also a consideration for the proposed “AI diffusion rules” aimed at curbing the overseas transfer of advanced chipmaking capabilities, which could be enacted as early as next month.
To mitigate escalating trade risks, TSMC has accelerated investment in U.S. production. The company recently unveiled plans to expand its American footprint, pledging an additional $100 billion in new U.S. facilities, supplementing $65 billion already earmarked for three advanced plants in Arizona.
Despite the blowout quarter, TSMC’s Taipei-listed shares slipped nearly 1% following the results, deepening the slide to a 20% decline for the year to date—an indication of ongoing investor anxiety over persistent trade and regulatory uncertainty.
