TSMC powers through with strong growth in Q1 2025, but tariff clouds loom
TSMC’s core business is thriving, but, an increasingly unpredictable geopolitical climate pose major threat to its market.
Taiwan Semiconductor Manufacturing Co. just delivered a blockbuster quarter, but looming U.S. tariffs are threatening to spoil the party.
The world's biggest chip-making company is off to a strong start in 2025, with first-quarter results showing sharp year-on-year gains and underscoring its dominant role in the global chip supply chain.
Net profit surged 60% to NT$361.56 billion ($11.16 billion), beating analysts’ expectations. Revenue climbed 42% year-over-year to NT$839.25 billion ($25.8 billion), above the company's guidance, signalling sustained demand for its high-performance chips.
It’s a continuation of a breakout 2024 for the chip giant, which capitalised on the AI boom and rising demand for advanced semiconductors. Even as investor excitement around AI cools somewhat, TSMC’s position as the go-to manufacturer for tech heavyweights like Apple, Qualcomm and Nvidia has helped it keep momentum.
But the road ahead is looking less certain.
Rising geopolitical tensions, particularly between the U.S. and China, are casting a shadow over the outlook for the global chip industry. TSMC, central to the semiconductor supply chain, is caught in the middle.
Emmanuel Oyedeji
U.S. President Donald Trump has warned that the company could face tariffs of up to 100% unless it ramps up U.S. production. Though the administration recently granted exemptions for some tech products, including chips, officials also signalled that new levies may follow, amplifying uncertainty for TSMC and its major customers.
In response, the company is doubling down on U.S. investment. TSMC recently committed an additional $100 billion to expand its American operations, on top of $65 billion already pledged for three chip plants in Arizona. The goal: produce 30% of the world’s most advanced chips in the U.S. and help build a more self-reliant semiconductor ecosystem.
With all these talks, investors are wary. TSMC shares are down 21% this year, dragged by tariff fears, slowing AI infrastructure investment, and a new low-cost AI model trend from China’s DeepSeek. Foreign investors have sold nearly $8.7 billion worth of shares so far in 2025, a sharp reversal from the past two years.
Even so, the chip company maintains a strong projection for its second-quarter revenue. The company expects revenue between $28.4 billion and $29.2 billion, up from $20.8 billion a year ago in Q2, and projects full-year revenue growth between 20% and 30%.
For now, TSMC is flying high. But with global trade tensions rising and the AI boom showing early signs of cooling, the company’s next big challenge may not be technical—it may be political.
