Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) First Quarter Profit Exceeds Expectations, Reaffirms 20% Growth Target for the Year Despite Tariff Concerns.

Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) announced better-than-expected first quarter 2025 results, as customers stockpiled advanced chips due to global trade disruptions caused by anticipated U.S. tariffs. The company maintained its revenue growth expectations for 2025, indicating confidence in weathering the industrial and economic impacts of potential trade wars. The main chip foundry for NVIDIA Corporation and Apple Inc. reported net profits of 361.6 billion New Taiwan dollars (11 billion U.S. dollars) for the quarter ending in March, exceeding analysts' average expectations of 346.8 billion New Taiwan dollars. The company's quarterly revenue growth of 42% year-over-year, announced last week, was partially due to the stockpiling of smartphones, laptops, and other electronics before the potential trade war outbreak. For the first quarter ending on March 31, 2025, in USD, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR reported revenue of 25.53 billion dollars, a 35.3% increase year-over-year but a 5.1% decrease quarter-over-quarter. Shipments of 3 nanometer chips accounted for 22% of total revenue; 5 nanometer chips accounted for 36%; and 7 nanometer chips accounted for 15%. Advanced technology accounted for 73% of total revenue. Despite tariff conflicts, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR continues to uphold its 2025 performance guidance Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR maintains its revenue growth expectations for 2025, expecting growth to reach around 20% this year, in line with the target set in January. The company also maintains its capital expenditure forecast for 2025 of 38 to 42 billion dollars, even after CEO Wei Zhejia announced an additional investment of 100 billion dollars in March with U.S. President Trump. The latest guidance from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may help soothe investors who have experienced turbulent days. Previously, restrictions on NVIDIA Corporation (NVDA.US) chip exports to China and disappointing financial reports from ASML Holding NV ADR (ASML.US) cast a shadow over the semiconductor industry. The market value of these two industry pillars evaporated by 200 billion dollars on Wednesday. In 2025, the market remains concerned about the impact of tariffs on the global economy, as this industry provides key components for almost all industries on Earth. Trump's trade war is leading economists to revise down their forecasts for global GDP growth, casting a shadow over everything from iPhone demand to the outlook for computing devices. Even before Washington imposed additional tariffs on most regions globally (but subsequently announced a 90-day suspension, excluding mainland China), analysts questioned whether tech giants like Microsoft Corporation and Meta Platforms would maintain their current levels of NVIDIA Corporation chip purchases in 2025. This AI chip manufacturer is the second-largest customer of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR after Apple Inc. After Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR unexpectedly announced an additional 100 billion dollars investment in the U.S., investors will also be closely watching whether their capital expenditure plans will be adjusted. Analysts Charles Shum and Steven Tseng pointed out that despite ASML Holding NV ADR receiving 1.2 billion euros in extreme ultraviolet lithography system orders in the first quarter (an 83% increase year-over-year, mainly due to Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR expanding production and the low base effect), the growth prospects for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR remain uncertain. U.S. export restrictions on specific AI chips (such as NVIDIA Corporation H20) and potential semiconductor import tariffs are bringing significant demand uncertainties to key customers such as NVIDIA Corporation and Apple Inc., which could still potentially slow down Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's revenue growth due to expansion plans by CKH HOLDINGS. Multiple uncertainties lead analysts to question whether Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will adjust its sales growth guidance for the mid-20% range in 2025. JPMorgan Chase believes the company may adjust to a mid-to-low range of 20% growth; Deutsche Bank says that as customers adapt to tariffs, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may adjust its revenue outlook accordingly.Sponsored ADR may revoke guidance directly. Several analysts have recently downgraded the company's target stock price.Semiconductor companies, which are highly sensitive to economic cycles, are bearing the brunt of this year's market sell-off. The benchmark chip manufacturer index plummeted over 22% in 2025, while the S&P 500 index fell by 10% during the same period. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR was not spared, with its stock price dropping by approximately 20% in 2025. Its current 12-month forward price-to-earnings ratio is around 14 times, lower than the three-year average of 16 times and also lower than the P/E ratio level of the Philadelphia Semiconductor Index. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's first-quarter sales growth of 42% confirms the demand for artificial intelligence.