Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday gave a strong revenue growth forecast for the current quarter and maintained its revenue growth forecast for this year of about 25 percent year-on-year, given that customers did not act differently despite potential US tariffs on chips.
The company has not engaged in any kind of discussions on a joint venture, or technology licensing, transfer or sharing, TSMC CEO C.C. Wei (魏哲家) told an online earnings conference, ending speculations that the company was in talks with Intel Corp to form a foundry joint venture.
TSMC also said it was not involved in “reciprocal” tariff negotiations with the US.
Photo: An Rong Xu, Bloomberg
“This kind of tariff discussion is between countries. We are a private company. Certainly, no, we are not getting involved,” Wei said.
Despite the uncertainties, TSMC said it continues to focus on its business’ fundamentals.
Revenue would expand about 13 percent sequentially this quarter to about US$28.8 billion, fueled by robust demand for advanced 3-nanometer and 5-nanometer chips used in high-performance computing (HPC) applications such as artificial intelligence (AI) servers, the chipmaker said.
“We understand there are uncertainties and risks from the potential impact of tariff policies. However, we have not seen any change in our customers’ behavior so far. Therefore, we continue to expect our full-year 2025 revenue to increase by close to mid-20s percent in US dollar terms,” Wei said.
The growth would mostly be driven by robust AI-related demand throughout this year, TSMC said.
It also reaffirmed that its revenue from AI accelerators would double this year, easing worries that DeepSeek’s (深度求索) cost-efficient AI models would encroach on Nvidia Corp’s turf.
TSMC said it is confident that its revenue growth from AI accelerators would approach 45 percent over the next five years.
“Other than China, demand is still very strong, especially in the US,” Wei said.
To cope with the strong AI chip demand, TSMC plans to double its advanced packaging, or chip-on-wafer-on-substrate (CoWoS), this year, Wei said, adding that TSMC could not satisfy customers’ demand three months ago, but now the CoWoS supply is catching up with demand “a little bit.”
TSMC also reiterated that it would stick to its previous capital expenditure budget of between US$38 billion and US$42 billion for this year, and that its revenue growth forecast for the global foundry industry remains unchanged at 10 percent annual growth this year.
Asked about whether its US investment totaling US$165 billion would spare the chipmaker from looming semiconductor tariffs by US President Donald Trump, TSMC did not address the question directly, saying only that it made the decision to cope with strong customer demand.
TSMC plans to build six chip manufacturing fabs in Arizona to produce advanced chips, Wei said.
The capacity of its 2-nanometer chip fabs in the US would account for 30 percent of its overall 2-nanometer chip capacity, he said.
The company would not slow down its capacity expansion in Japan and Germany, he added.
TSMC yesterday reported an annual growth of 60.3 percent in net profit to NT$361.56 billion (US$11.11 billion) for the first quarter of this year. On a quarterly basis, net profit dropped 3.5 percent.
Earnings per share surged from NT$8.7 a year earlier to NT$13.94, but are down from NT$14.45 a quarter earlier.
Gross margin dropped to 48.5 percent from the previous quarter due to earthquake damage and higher costs from overseas fabs. The company said it expects gross margin this quarter to stand between 47 percent and 49 percent.
TSMC also said it expects its overseas fabs to erode gross margin by about 3 percent this year and that the dilution would be greater, at about 4 percent a year over the next five years due to higher costs.
However, its goal of keeping gross margin at more than 53 percent in the longer term would be achievable, it said.
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