Star Metro - Taiwan's TSMC net profit soars as US tariff threat looms

Taiwan Semiconductor Manufacturing Company is the world's largest contract maker of chips that have become the lifeblood of the global economy, powering everything from smartphones to missiles.

Demand for chips has soared in recent years with the growth of AI technology, but there are fears US President Donald Trump's far-reaching tariffs could drive up consumer prices and hurt chipmakers.

TSMC, which counts Nvidia and Apple among its clients, said its net profit for the first three months of 2025 rose 60.3 percent from a year ago to NT$361.56 billion ($11.1 billion).

That beat expectations of NT$346.76 billion, according to a Bloomberg News survey of analysts.

Net revenue for the quarter soared nearly 42 percent to NT$839.25 billion on-year, also beating forecasts, figures released by the company last week showed.

The first quarter ended before Trump's "Liberation Day" tariffs on April 2.

TSMC chairman and chief executive C.C. Wei said the company understood there were "uncertainties and risk from the potential impact of tariff policies" but so far it had not detected "any change in customer behaviour".

"We continue to expect our full-year 2025 revenue to increase by close to mid-20s percent in US dollar terms," Wei said, adding that AI-related demand was also expected to be "robust".

"We might get a better picture in the next few months and we will continue to closely monitor the potential impact to the end-market demand and manage our business prudently," Wei said.

TSMC's earnings follow Nvidia's announcement that it expects a $5.5 billion hit this quarter owing to a new US licensing requirement on the H20 chips it can legally sell in China.

Dutch tech giant ASML, which makes machines that produce semiconductors, also warned of growing economic uncertainty due to US tariffs but kept its 2025 sales forecast intact.

- Tariff impact -

TSMC has been in the cross-hairs of Trump, who has accused Taiwan of stealing the US chip industry.

There had been hopes that TSMC's plan to invest an additional $100 billion in the United States would shield Taiwan from new tariffs.

Trump still imposed a 32 percent duty on Taiwanese imports as part of his sweeping tariffs on global trade partners -- which he later paused for 90 days -- but it excluded semiconductors.

Washington is pushing forward with plans to slap import levies on semiconductors and chip-making equipment, with the launch of "national security" probes into the industry.

Taiwan's Minister of Economic Affairs Kuo Jyh-huei said on Tuesday the government would carry out simulations to gauge the possible impact of US tariffs.

Taiwanese negotiators have started talks with US officials over Trump's tariffs but Wei said TSMC was "not getting involved".

Taiwan already pledged to increase investment in the United States, purchase more US energy and boost defence spending to more than three percent of GDP in a bid to head off Trump's levies.

Also clouding the outlook for TSMC was a report that it planned to form a joint venture with Intel to operate the American company's chipmaking facilities.

Wei said on Thursday that "TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology transfer and sharing".

D.Fraser--SMC