TSMC (2330.TW), the primary world producer of superior chips utilized in synthetic intelligence purposes, is about to report a 54% leap in first-quarter revenue on Thursday, although can also be more likely to flag threat from commerce insurance policies of U.S. President Donald Trump.
The world’s largest contract chipmaker, whose prospects embrace Apple (AAPL.O), and Nvidia (NVDA.O), has benefited from a pattern in direction of implementing AI options in on-line merchandise. However the agency faces headwind not simply from Trump’s import tariffs but additionally his criticism of Taiwan’s dominance of the chip business.
Taiwan Semiconductor Manufacturing Co is about to report web revenue of T$347.8 billion ($10.74 billion) for the three months via March 31, in accordance with a LSEG SmartEstimate drawn from 17 analysts. SmartEstimates give larger weighting to forecasts from analysts who’re extra persistently correct.
That estimate compares to the 2024 first-quarter web revenue of T$225.5 billion.
TSMC has been spending billions of {dollars} on new factories abroad, although it mentioned most manufacturing will stay in Taiwan. It introduced a $100 billion investment with Trump on the White Home final month, on high of $65 billion pledged for 3 vegetation within the U.S. state of Arizona.
Trump has each praised Taiwan’s chip business and threatened it with tariffs.
Final week, he mentioned he had advised TSMC it would have to pay a tax of as much as 100% if it didn’t construct factories within the U.S. On Sunday, he mentioned the exclusion of smartphones and computer systems from tariffs on China can be short-lived, pledging a nationwide safety commerce investigation into the semiconductor sector.
“The corporate will seemingly double down on abroad fab investments to mitigate the geopolitical threat, regardless of two to a few share factors of gross margin dilution for the subsequent 5 years,” mentioned SemiAnalysis analyst Sravan Kundojjala.
“It will seemingly guarantee TSMC will get beneficial therapy from the U.S. authorities and minimise the tariff burden.”
Apple’s iPhones, given they’re primarily made in China, is one other threat space for TSMC, mentioned Cathay Futures analyst Venson Tsai.From massive tech feeling the warmth of a market meltdown, to the bot that may learn human feelings,
“If the iPhone can’t be bought, then TSMC’s chips can’t both,” Tsai mentioned.
TSMC final week reported a surge in first-quarter income in Taiwan {dollars}, barely forward of market expectations. The corporate provides its income outlook in U.S. {dollars} on its quarterly earnings name, scheduled for 0600 GMT on Thursday.
It can additionally replace its outlook for the present quarter in addition to for the total 12 months, together with deliberate capital expenditure for manufacturing will increase.
On its final earnings name in January, TSMC mentioned it anticipated capital spending this 12 months to be $38 billion to $42 billion, a rise of as a lot as 41% from final 12 months.
($1 = 32.3720 Taiwan {dollars})
Supply: www.reuters.com
