TSMC Q1 Net Profit Surges 60.3% on AI, 5G Demand

Taiwan Semiconductor Manufacturing Company (TSMC) reported a 60.3% year-on-year increase in net profit for the first quarter, reaching NT$361.56 billion. The company's net revenue for the quarter grew by 41.6% to NT$839.25 billion. This performance exceeded market expectations, with revenue and net profit surpassing estimates of NT$835.13 billion and NT$354.14 billion, respectively.

TSMC's strong performance was driven by its high-performance computing segment, which covers applications in artificial intelligence and 5G. This segment saw a 7% increase in sales compared to the previous quarter, contributing 59% of the total revenue. The company's advanced technology products, with 7 nanometers or smaller, accounted for 73% of the total wafer revenue. Smaller nanometer sizes in semiconductor technology result in more compact transistor designs, leading to enhanced processing power and efficiency.

Despite facing potential headwinds from U.S. trade policies under Donald Trump, TSMC maintained its annual revenue forecast. The company has been subject to broad trade tariffs and stricter export controls on its customers, including NVIDIA and AMD. However, TSMC's CEO, C.C. Wei, noted that the business impact from these policies remains uncertain, and the company has not observed any changes in customer behavior.

TSMC's investments in overseas facilities, totaling tens of billions of dollars, are part of its supply chain diversification efforts. The company has also announced plans to invest an additional $100 billion in the U.S., following a previous commitment to build three factories with an investment of $650 billion. This move is seen as a response to U.S. trade policies, aiming to mitigate potential risks and ensure business continuity.

During the earnings call, Wei clarified that TSMC is not in discussions with any other company regarding joint ventures, technology licensing, or collaborations. This statement contradicts previous reports suggesting otherwise. The company's focus remains on its core business and strategic investments to support long-term growth.

Looking ahead, TSMC expects its business to be supported by the strong growth of 3-nanometer and 5-nanometer technologies in the second quarter of 2025. The company's commitment to innovation and strategic investments positions it well to capitalize on the continued demand for advanced semiconductor solutions, particularly in the artificial intelligence sector.